[Code of Federal Regulations]
[Revised as of April 1, 1997]
Subpart A--Scope
Sec.
19.1 General.
19.2 Territorial extent.
19.3 Related regulations.
Subpart B--Definitions
19.11 Meaning of terms.
Subpart C--Taxes
Gallonage Taxes
19.21 Tax.
19.22 Attachment of tax.
19.23 Lien.
19.24 Persons liable for tax.
19.25 Time for tax determination.
19.26 Tax on wine.
Assessments
19.31 Production not accounted for.
19.32 Assessment of tax on spirits, denatured spirits,
or wines in bond which are lost, destroyed or removed without authorization.
Effective Tax Rates
19.34 Computation of effective tax rate.
19.35 Application of effective tax rate (Actual).
19.36 Standard effective tax rate.
19.37 Average effective tax rate.
19.38 Inventory reserve account.
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Claims
19.41 Claims on spirits, denatured spirits, articles, or wines
lost or destroyed in bond.
19.42 Claims on spirits returned to bonded premises.
19.43 Claims relating to spirits lost after tax determination.
19.44 Execution of claims and supporting documents.
19.45 Claims for credit of tax.
19.46 Adjustments for credited tax.
Subpart Ca--Special (Occupational) Taxes
Sec.
19.49 Liability for special tax.
19.50 Rates of special tax.
19.51 Special tax returns.
19.52 Employer identification number.
Special Tax Stamps
19.53 Issuance, distribution, and examination of special tax
stamps.
19.54 Changes in special tax stamps.
Subpart D--Administrative and Miscellaneous Provisions
Activities Not Subject to This Part
19.57 Recovery and reuse of denatured spirits in manufacturing
processes.
19.58 Use of taxpaid distilled spirits to manufacture products
unfit for beverage use.
Authorities of the Director
19.61 Forms prescribed.
19.62 Alternate methods or procedures.
19.63 Pilot operations.
19.64 [Reserved]
19.65 Experimental distilled spirits plants.
19.66 Application to establish experimental plants.
19.67 Spirits produced in industrial processes.
19.68 Other businesses.
19.70 Exemptions to meet the requirements of National defense.
19.71 Experimental or research operations by scientific
institutions and colleges of learning.
Authorities of the regional director (Compliance)
19.72 Other businesses.
19.73 Emergency variations from requirements.
19.74 Disaster exemptions.
19.75 Assignment of officers and supervision of operations.
19.76 Allowance of remission, abatement, credit or refund
of tax.
19.77 Installation of meters, tanks and other apparatus.
19.78 Approval of qualifying documents.
19.79 Discontinuance of storage facilities.
Authorities of ATF Officers
19.81 Right of entry and examination.
19.82 Detention of containers.
19.83 Samples for the United States.
19.84 Gauging and measuring equipment.
Entry and Examination of Premises
19.86 Furnishing facilities and assistance.
Gauging of Spirits, Wines or Alcoholic Flavoring Materials
19.91 Gauging.
19.92 When gauges are required.
19.93 Quantity determination of spirits in bond.
Securing of Conveyances Used for Transporting Spirits
19.96 Securing of conveyances.
Conveyance of Spirits or Wines on Plant Premises
19.97 Taxpaid spirits or wines on bonded premises.
19.98 Conveyance of untaxpaid spirits or wines within a
distilled spirits plant.
19.99 Spirits in customs custody.
Penalties of Perjury
19.100 Execution under penalties of perjury.
Subpart E--[Reserved]
Subpart F--Location and Use
19.131 Restrictions as to location.
19.132 Continuity of premises.
19.133 Use of distilled spirits plant premises.
19.134 Bonded warehouses not on premises qualified for
production of spirits.
Subpart G--Qualification of Distilled Spirits Plants
19.151 General requirements for registration.
19.152 Data for application for registration.
19.153 Statement of physical security.
19.154 Notice of registration.
19.155 Maintenance of registration file.
19.156 Powers of attorney.
19.157 Operating permits.
19.158 Data for application for operating permits.
19.159 Issuance of operating permits.
19.160 Duration of permits.
19.161 Denial of permit.
19.162 Correction of permits.
19.163 Suspension or revocation.
19.164 Rules of practice in permit proceedings.
19.165 Trade names.
19.166 Major equipment.
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19.167 Organizational documents.
19.168 Description of plant.
19.169 Registry of stills.
19.170 Statement of production procedure.
Changes After Original Qualification
19.180 Application for amended registration.
19.181 Automatic termination of permits.
19.182 Change in name of proprietor.
19.183 Change of trade name.
19.184 Changes in stockholders.
19.185 Changes in officers and directors.
19.186 Change in proprietorship.
19.187 Adoption of formulas.
19.188 Partnerships.
19.189 Change in location.
19.190 Changes in premises.
19.191 Change in operations.
19.192 Change in production procedure.
19.193 Changes in construction or use of buildings and
equipment.
Operations by Alternating Proprietors
19.201 Procedure for alternating proprietors.
Alternate Operations
19.202 Alternate use of premises and equipment for customs
purposes.
19.203 Alternation of distilled spirits plant and bonded wine
cellar
premises.
19.204 Alternation of distilled spirits plant and taxpaid
wine bottling
house premises.
19.205 Alternate curtailment and extension of bonded premises
for use
as general premises.
19.206 Curtailment and extension of plant premises for
the manufacture of eligible flavors.
Permanent Discontinuance of Business
19.211 Notice of permanent discontinuance.
Subpart H--Bonds and Consents of Surety
19.231 Filing of operations or unit bonds.
19.232 Additional condition of operations bond.
19.233 Corporate surety.
19.234 Deposit of securities in lieu of corporate surety.
19.235 Consents of surety.
19.236 Filing and execution of powers of attorney.
19.237 Disapproval of bonds or consents of surety.
19.238--19.240 [Reserved]
19.241 Operations bond--distilled spirits plant and adjacent
bonded wine cellar.
19.242 Area operations bond.
19.243 Withdrawal bond.
19.244 Unit bond.
19.245 Bonds and penal sums of bonds.
19.246 Strengthening bonds.
New or Superseding Bonds
19.247 General.
19.248 New or superseding bond.
Termination of Bonds
19.249 Termination of bonds.
19.250 Application of surety for relief from bond.
19.251 Relief of surety from bond.
19.252 Release of pledged securities.
Subpart I--Construction, Equipment and Security
19.271 Construction of buildings.
19.272 Equipment.
19.273 Tanks.
19.274 Pipelines.
19.275 Continuous distilling system.
19.276 Package scales.
19.277 Measuring devices and proofing instruments.
19.278 Identification of structures, areas, apparatus,
and equipment.
19.279 Office facilities.
19.280 Signs.
19.281 Security.
19.282 Breaking Government locks.
Subpart J--Production
19.311 Notice by proprietor.
19.312 Receipt of materials.
19.313 Use of materials in production of spirits.
19.314 Removal of fermenting material.
19.315 Removal or destruction of distilling material.
19.316 Distillation.
19.317 Treatment during production.
19.318 Addition of caramel to rum or brandy and addition
of oak chips to spirits.
19.319 Production gauge.
19.320 Identification of spirits.
19.321 Entry.
19.322 Distillates containing extraneous substances.
Formula
19.324 Statement of production procedure or Form 5110.38.
Chemical By-Products
19.326 Spirits content of chemicals produced.
19.327 Disposition of chemicals.
19.328 Wash water.
Inventories
19.329 Production inventories.
Subpart K--Redistillation
19.331 General.
19.332 Receipts for redistillation
19.333 Redistillation.
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Subpart L--Storage
19.341 General.
19.342 Receipt and storage of bulk spirits and wines.
19.343 Addition of oak chips to spirits and addition of
caramel to brandy and rum.
Filling and Changing Packages
19.344 Filling of packages from tanks.
19.345 Change of packages.
Mingling or Blending of Spirits
19.346 Mingling or blending of spirits for further storage.
19.347 Packages dumped for mingling.
19.348 Determining age of mingled spirits.
19.349 Mingled spirits or wines held in tanks.
Inventories
19.353 Storage inventories.
Subpart M--Processing Operations Other Than Denaturation and Manufacture
of Articles
19.371 General.
Receipt and Use of Spirits, Wines, and Alcoholic Flavoring Materials
19.372 Receipt of spirits, wines and alcoholic flavoring materials
for processing.
19.373 Use of spirits, wines and alcoholic flavoring materials.
19.374 Manufacture of nonbeverage products, intermediate
products or eligible flavors.
Obscuration
19.376 Determining obscuration.
Formulas
19.378 Formula requirement.
Bottling, Packaging and Removal of Products
19.381 Removals from processing.
19.382 Bottling tanks.
19.383 Bottling tank gauge.
19.384 Preparation of bottling or packaging record.
19.385 Labels to agree with contents of tanks and containers.
19.386 Alcohol content and fill.
19.387 Completion of bottling.
19.388 Cases.
19.389 Remnants.
19.390 Filling packages.
19.391 Removal by bulk conveyances or pipelines.
19.392 Rebottling.
19.393 Reclosing and relabeling.
19.394 Bottled-in-bond spirits.
19.395 Labels for export spirits.
19.396 Spirits removed for shipment to Puerto Rico.
19.397 Spirits not originally intended for export.
19.398 Alcohol.
Records
19.400 Daily summary record of spirits bottled or packaged.
Inventories
19.401 Inventories of wines and bulk spirits (except in packages)
in processing account.
19.402 Inventories of bottled and packaged spirits.
Subpart N--Denaturing Operations and Manufacture of Articles
19.451 General.
Denaturation
19.452 Formulas.
19.453 Testing of denaturants.
19.454 Gauge of denaturation.
19.455 Dissolving of denaturants.
19.456 Adding denaturants.
19.457 Neutralizing denatured spirits.
19.458 Restoration and redenaturation of recovered denatured
spirits and recovered articles.
19.459 Mixing of denatured spirits.
19.460 Conversion of denatured alcohol formulas.
19.461 Receipt and storage of denatured spirits.
19.462 Filling of containers from tanks.
19.463 Containers for denatured spirits.
Inventories
19.464 Denatured spirits inventories.
Articles
19.471 Manufacture of articles.
Subpart O--Spirits From Customs Custody
19.481 General.
19.482 Age and fill date.
19.483 Recording gauge.
Imported Spirits
19.484 Marks on containers of imported spirits.
Puerto Rican and Virgin Islands Spirits
19.485 Marks on containers of Puerto Rican and Virgin Islands
spirits.
19.486 Additional tax on nonbeverage spirits.
19.487 Abatement, remission, credit or refund.
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Subpart P--Transfers and Withdrawals
General
19.501 Authority to withdraw.
19.502 Withdrawal of spirits on production or filling
gauge.
19.503 Determination of tare.
Transfer Between Bonded Premises
19.505 Authorized transfers.
19.506 Application to receive spirits in bond.
19.507 Termination of application.
19.508 Consignor premises.
19.509 Reconsignment.
19.510 Consignee premises.
Withdrawals on Determination and Payment of Tax
19.515 Determination and payment of tax.
19.516 Bond account.
19.517 Gauge for tax determination.
19.518 Imported spirits.
19.519 Methods of tax payment.
19.520 Employer indentification number.
19.521 Application for employer identification number.
19.522 Taxes to be collected by returns.
19.523 Time for filing returns.
19.524 Payment of tax by electronic fund transfer.
19.525 Manner of filing returns.
19.526 Removal of spirits on tax determination.
Withdrawal of Spirits Without Payment of Tax
19.531 Authorized withdrawals without payment of tax.
19.532 Withdrawals of spirits for use in wine production.
19.533 Withdrawal of spirits without payment of tax for
experimental or research use.
19.534 Withdrawals of spirits for use in production of
nonbeverage wine and nonbeverage wine products.
Withdrawal of Spirits Free of Tax
19.536 Authorized withdrawals free of tax.
19.537 Withdrawal of spirits free of tax.
19.538 Withdrawal of spirits by the United States.
19.539 Disposition of excess spirits.
19.540 Removal of denatured spirits and articles.
19.541 Reconsignment.
Subpart Q--Losses and Shortages
Losses
19.561 Losses in general.
19.562 Determination of losses in bond.
19.563 Loss of spirits from packages.
19.564 Losses after tax determination.
Shortages
19.565 Shortages of bottled distilled spirits.
Subpart R--Containers and Marks
Containers
19.581 Authorized containers.
19.582 Spirits for nonindustrial use.
19.583 Spirits for industrial use.
19.584 Packages.
19.585 Bulk conveyances.
19.586 Tanks.
19.587 Pipelines.
19.588 Construction of bulk conveyances.
19.589 Restrictions on dispositions of bulk spirits.
Marks
19.592 General.
19.593 Package identification numbers in production and
storage.
19.594 Numbering of packages and cases in processing.
19.595 Specifications for marks.
19.596 Marks on packages of spirits filled on bonded remises.
19.597 Kind of spirits.
19.598 [Reserved]
19.599 Change of packages in storage.
19.600 [Reserved]
19.601 Marks on containers of specially denatured spirits.
19.602 Marks on containers of completely denatured alcohol.
19.603 [Reserved]
19.604 Caution label.
19.605 Additional marks on portable containers.
19.606 Marks on bulk conveyances.
19.607 Marks on cases.
19.608 Cases of industrial alcohol.
19.609 [Reserved]
19.610 Obliteration of marks.
19.611 Relabeling and reclosing off bonded premises.
19.612 Authorized abbreviations to identify marks.
Subpart S--Liquor Bottle and Label Requirements
19.631 Scope of subpart.
Liquor Bottle Requirements
19.632 Bottles authorized.
19.633 Distinctive liquor bottles.
19.634 Receipt and storage of liquor bottles.
19.635 Bottles to be used for display purposes.
19.636 Bottles for testing purposes.
19.637 Bottles not constituting approved containers.
19.638 Disposition of stocks of liquor bottles.
19.639 Use and resale of liquor bottles.
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Bottle Label Requirements
19.641 Certificate of label approval or exemption.
19.642 Statements required on labels under an exemption
from label approval.
19.643 Brand name, kind, alcohol content, and State of
distillation.
19.644 Net contents.
19.645 Name and address of bottler.
19.646 Age of whisky containing no neutral spirits.
19.647 Age of whisky containing neutral spirits.
19.648 Age of brandy.
19.649 Presence of neutral spirits and coloring, flavoring,
and blending materials.
19.650 Country of origin.
Subpart T--Closures.
19.661 General.
19.662 Affixing closures.
19.663 Reclosing.
Subpart U--Return of Spirits to Bonded Premises and Voluntary
Destruction
Returns
19.681 Return of taxpaid spirits to bonded premises.
19.682 Receipt and gauge of returned taxpaid spirits.
19.683 Return of recovered denatured spirits and recovered
articles.
19.684 Articles and spirits residues received for redistillation.
19.685 Return of recovered tax-free spirits, and spirits
and denatured
spirits withdrawn free of tax.
19.686 Return of spirits withdrawn without payment of
tax.
19.687 Return of spirits withdrawn for export with benefit
of drawback.
19.688 Abandoned spirits.
Voluntary Destruction
19.691 Voluntary destruction.
Subpart V--Samples of Spirits
19.701 Spirits withdrawn from bonded premises.
19.702 Samples used on bonded premises.
19.703 Taxpayment of samples.
19.704 Labels.
Subpart W--Records and Reports
General
19.721 Records.
19.722 Conversion between metric and U.S. units.
19.723 Maintenance and preservation of records.
19.724 Modified forms.
19.725 Photographic copies of records.
19.726 Authorized abbreviations to identify spirits.
Records
19.731 General.
19.732 Details of daily records.
Production Account
19.736 Daily production records.
Storage Account
19.740 Daily storage records.
19.741 Package summary records.
19.742 Tank record of wine or spirits of less than 190
degrees of proof.
19.743 Tank summary record for spirits of 190 degrees
or more of proof.
Processing Account
19.746 Processing.
19.747 Records of manufacturing.
19.748 Dump/batch records.
19.749 Bottling and packaging record.
19.750 Records of alcohol content and fill tests.
19.751 Records of finished products.
19.752 Denaturation records.
19.753 Record of article manufacture.
Tax Records
19.761 Record of tax determination.
19.762 Daily summary record of tax determinations.
19.763 Record of average effective tax rates.
19.764 Inventory reserve records.
19.765 Standard effective tax rates.
Other Records
19.766 Record of samples.
19.767 Record of destruction.
19.768 Gauge record.
19.769 Package gauge record.
19.770 Transfer record.
19.771--19.772 [Reserved]
19.773 Daily record of wholesale liquor dealer and taxpaid
storeroom operations.
19.774 Record of inventories.
19.775 Record of securing devices.
19.776 Record of scale tests.
19.777 [Reserved]
19.778 Removal on or after January 1, 1987 of Puerto Rican
and Virgin slands spirits, and rum imported from all other areas.
19.779 Record of shipment of spirits and specially denatured
spirits withdrawn free of tax.
19.780 Record of distilled spirits shipped to manufacturers
of nonbeverage products.
Submission of Forms and Reports
19.791 Submission of transaction forms.
19.792 Reports.
[[Page 264]]
Subpart X--Production of Vinegar by the Vaporizing Process
Scope of Subpart
19.821 Production of vinegar by the vaporizing process.
Qualification Documents
19.822 Application.
19.823 Changes after original qualification.
19.824 Notice of permanent discontinuance of business.
Construction and Equipment
19.825 Construction and equipment.
Plant Operations
19.826 Authorized operations.
19.827 Conduct of operations.
19.828 Removals from the premises.
Records
19.829 Daily records.
Administrative and Miscellaneous
19.830 Application of distilled spirits tax.
Subpart Y--Distilled Spirits for Fuel Use
19.901 Scope of subpart.
19.902 Waiver for alcohold fuel plants.
19.903 Alternate methods or procedures.
19.904 Emergency variations from requirements.
19.905 Taxes.
19.906 Special (occupational) tax.
Definitions
19.907 Meaning of terms.
Permits
19.910 Application for permit required.
19.911 Criteria for issuance of permit.
19.912 Small plants.
19.913 Action on applications to establish small plants.
19.914 Medium plants.
19.915 Large plants.
19.916 Organizational documents.
19.917 Powers of attorney.
19.918 Information already on file and supplemental information.
Changes Affecting Applications and Permits
19.919 Changes affecting applications and permits.
19.920 Automatic termination of permits.
19.921 Change in type of alcohol fuel plant.
19.922 Change in name of proprietor.
19.923 Changes in officers, directors, or principal persons.
19.924 Change in proprietorship.
19.925 Continuing partnerships.
19.926 Change in location.
Alternate Operations
19.930 Alternating proprietorship.
Permanent Discontinuance of Business
19.945 Notice of permanent discontinuance.
Suspension or Revocation of Permits
19.950 Suspension or revocation.
Bonds
19.955 Bonds.
19.956 Amount of bond.
19.957 Instructions to compute bond penal sum.
19.958 Conditions of bond.
19.959 Additional provisions with respect to bonds.
Construction, Equipment and Security
19.965 Construction and equipment.
19.966 Security.
19.967 Additional security.
Supervision
19.970 Supervision of operations.
Accounting for Spirits
19.980 Gauging.
19.981 Inventories.
19.982 Records.
19.983 Spirits rendered unfit for beverage use in the
production process.
19.984 Record of spirits received.
19.985 Record of spirits rendered unfit for beverage use.
19.986 Record of dispositions.
19.987 Maintenance and retention of records.
19.988 Reports.
Redistillation
19.990 Redistillation of spirits or fuel alcohol received
on the plant premises.
Uses, Withdrawals, and Transfers
19.995 Use on premises.
19.996 Withdrawal of spirits.
19.997 Withdrawal of fuel alcohol.
19.998 Transfer in bond of spirits.
19.999 Consignor premises.
19.1000 Reconsignment in transit.
19.1001 Consignee premises.
19.1002 Prohibited uses, transfers and withdrawals.
Materials for Rendering Spirits Unfit for Beverage Use
19.1005 Authorized materials.
19.1006 Other materials.
19.1007 Samples.
Marks
19.1008 Marks.
[[Page 265]]
Subpart Z--Paperwork Reduction Act
19.1010 OMB control numbers assigned pursuant to the Paperwork
Reduction Act.
Authority: 19 U.S.C. 81c, 1311; 26 U.S.C. 5001, 5002, 5004-5006,
5008, 5010, 5041, 5061, 5062, 5066, 5081, 5101, 5111-5113, 5142, 5143,
5146, 5171-5173, 5175, 5176, 5178-5181, 5201-5204, 5206, 5207, 5211-
5215, 5221-5223, 5231, 5232, 5235, 5236, 5241-5243, 5271, 5273, 5301,
5311-5313, 5362, 5370, 5373, 5501-5505, 5551-5555, 5559, 5561, 5562,
5601, 5612, 5682, 6001, 6065, 6109, 6302, 6311, 6676, 6806, 7011, 7510,
7805; 31 U.S.C. 9301, 9303, 9304, 9306.
Source: T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, unless otherwise
noted.
Subpart A--Scope
Sec. 19.1 General.
The regulations in this part relate to the location, construction,
equipment, arrangement, qualification, and operation (including
activities incident thereto) of distilled spirits plants.
Sec. 19.2 Territorial extent.
This part applies to the several States of the United States and the
District of Columbia.
Sec. 19.3 Related regulations.
Regulations relating to this part are listed below:
27 CFR part 1--Basic Permit Requirements Under the Federal Alcohol
Administration Act.
27 CFR part 2--Nonindustrial Use of Distilled Spirits and Wine.
27 CFR part 3--Bulk Sales and Bottling of Distilled Spirits.
27 CFR part 4--Wine Labeling and Advertising.
27 CFR part 5--Labeling and Advertising Distilled Spirits.
27 CFR part 20--Distribution and Use of Denatured Alcohol and Rum.
27 CFR part 21--Formulas for Denatured Alcohol and Rum.
27 CFR part 22--Distribution and Use of Tax-Free Alcohol.
27 CFR part 24--Wine.
27 CFR part 30--Gauging Manual.
27 CFR part 170--Miscellaneous Regulations Relating to Liquor.
27 CFR part 194--Liquor Dealers.
27 CFR part 197--Drawback on Distilled Spirits Used in Manfacturing Nonbeverage
Products.
27 CFR part 200--Rules of Practice in Permit Proceedings.
27 CFR part 250--Liquors and Articles from Puerto Rico and the
Virgin Islands.
27 CFR part 251--Importation of Distilled Spirits, Wine, and Beer.
27 CFR part 252--Exportation of Liquors.
31 CFR part 225--Acceptance of Bonds, Notes, or Other Obligations
Issued or Guaranteed by the United States as Security in Lieu of Surety
or Sureties on Penal Bonds.
[T.D. ATF-199, 50 FR 9160, Mar. 6, 1985, as amended by T.D. ATF-207, 50
FR 23681, June 5, 1985; T.D. ATF-299, 55 FR 24989, June 19, 1990]
Subpart B--Definitions
Sec. 19.11 Meaning of terms.
When used in this part and in forms prescribed under this part,
terms shall have the meaning ascribed in this section. Words in the
plural form include the singular, and vice versa, and words indicating
the masculine gender include the feminine. The terms ``includes'' and
``including'' do not exclude other things not enumerated which are in
the same general class.
Alcoholic flavoring materials. Any nonbeverage product on which
drawback has been or will be claimed under 26 U.S.C. 5131-5134 or
flavors imported free of tax which are unfit for beverage purposes. The
term includes eligible flavors but does not include flavorings or
flavoring extracts manufactured on the bonded premises of distilled
spirits plant as an intermediate product.
Application for registration. The application required under 26
U.S.C. 5171(c).
Area supervisor. The supervisory officer of the Bureau of Alcohol,
Tobacco and Firearms area office.
Article. A product, containing denatured spirits, which was
manufactured under 27 CFR part 20 or this part.
ATF bond. For purposes of this part, ATF bond means the internal
revenue bond as prescribed in 26 U.S.C. Chapter 51.
ATF officer. An officer or employee of the Bureau of Alcohol,
Tobacco and Firearms (ATF) authorized to perform any function relating
to the administration or enforcement of this part.
Bank. Any commercial bank.
Banking day. Any day during which a bank is open to the public for
carrying on substantially all its banking functions.
Basic permit. The document authorizing the person named therein to
engage in a designated business or activity
[[Page 266]]
under the Federal Alcohol Administration Act.
Bonded premises. The premises of a distilled spirits plant, or part
thereof, as described in the application for registration, on which
distilled spirits operations defined in 26 U.S.C. 5002 are authorized to
be conducted.
Bottler. A proprietor of a distilled spirits plant qualified under
this part as a processor who bottles distilled spirits.
Bulk container. Any approved container having a capacity in excess
of one wine gallon.
Bulk conveyance. A tank car, tank truck, tank ship, tank barge, or a
compartment of any such conveyance, or any other container approved by
the Director for the conveyance of comparable quantities of spirits,
including denatured spirits, and wines.
Bulk distilled spirits. The term bulk distilled spirits means
distilled spirits in a container having a capacity in excess of one
gallon.
Business day. Any day, other than a Saturday, Sunday, or a legal
holiday. (The term legal holiday includes all holidays in the District
of Columbia and statewide holidays in the particular State in which the
claim, report, or return, as the case may be, is required to be filed,
or the act is required to be performed.)
Carrier. Any person, company, corporation, or organization,
including a proprietor, owner, consignor, consignee, or bailee, who
transports distilled spirits, denatured spirits, or wine in any manner
for himself or others.
CFR. The Code of Federal Regulations.
Commercial bank. A bank, whether or not a member of the Federal
Reserve system, which has access to the Federal Reserve Communications
System (FRCS) or Fedwire. The ``FRCS'' or ``Fedwire'' is a
communications network that allows Federal Reserve system member banks
to effect a transfer of funds for their customers (or other commercial
banks) to the Treasury Account at the Federal Reserve Bank of New York.
Container. A receptacle, vessel, or form of bottle, can, package,
tank or pipeline (where specifically included) used or capable of being
used to contain, store, transfer, convey, remove, or withdraw spirits
and denatured spirits.
Denaturant or denaturing material. Any material authorized under 27
CFR part 21 for addition to spirits in the production of denatured
spirits.
Denatured spirits. Spirits to which denaturants have been added as
provided in 27 CFR part 21.
Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the
Department of the Treasury, Washington, DC.
Director of the service center. A director of an internal revenue
service center.
Distilled spirits operations. Any authorized distilling,
warehousing, or processing operations conducted on the bonded premises
of a plant qualified under this part.
Distilling material. Any fermented or other alcoholic substance
capable of, or intended for use in, the original distillation or other
original processing of spirits.
District director. A district director of internal revenue.
Effective tax rate. The net tax rate after reduction for any credit
allowable under 26 U.S.C. 5010 for wine and flavor content at which the
tax imposed on distilled spirits by 26 U.S.C. 5001 or 7652 is paid or
determined.
Electronic fund transfer or EFT. Any transfer of funds effected by a
proprietor's commercial bank, either directly or through a correspondent
banking relationship, via the Federal Reserve Communications System
(FRCS) or Fedwire to the Treasury Account at the Federal Reserve Bank of
New York.
Eligible flavor. A flavor which:
(1) Is of a type that is eligible for drawback of tax under 26
U.S.C. 5134,
(2) Was not manufactured on the premises of a distilled spirits
plant, and
(3) Was not subjected to distillation on distilled spirits plant
premises such that the flavor does not remain in the finished product.
Eligible wine. A wine containing not more than 0.392 gram of carbon
dioxide per 100 milliliters of wine which has not been subject to
distillation at a distilled spirits plant after receipt in bond.
[[Page 267]]
Export or exportation. A severance of goods from the mass of things
belonging to the United States with the intention of uniting them to the
mass of things belonging to some foreign country and shall include
shipments to any possession of the United States. For the purposes of
this part, shipments to the Commonwealth of Puerto Rico, and to the
territories of the Virgin Islands, American Samoa, and Guam, shall also
be treated as exportations.
Fermenting material. Any material which is to be subjected to a
process of fermentation to produce distilling material.
Fiduciary. A guardian, trustee, executor, administrator, receiver,
conservator, or any person acting in any fiduciary capacity for any
person.
Fiscal year. The period October 1 of one calendar year through
September 30 of the following year.
Gallon or wine gallon. The liquid measure equivalent to the volume
of 231 cubic inches.
In bond. When used with respect to spirits, denatured spirits,
articles, or wine refers to spirits, denatured spirits, articles, or
wine possessed under bond to secure the payment of the taxes imposed by
26 U.S.C. Chapter 51, and on which such taxes have not been determined.
The term includes such spirits, denatured spirits, articles, or wine on
the bonded premises of a distilled spirits plant, such spirits,
denatured spirits, or wines in transit between bonded premises
(including, in the case of wine, bonded wine cellar premises).
Additionally, the term refers to spirits in transit from customs custody
to bonded premises, and spirits withdrawn without payment of tax under
26 U.S.C. 5214, and with respect to which relief from liability has not
occurred under the provisions of 26 U.S.C. 5005(e)(2).
Industrial use. As applied to spirits, shall have the meaning
ascribed in 27 CFR part 2.
Intermediate product. Any product manufactured pursuant to an
approved formula under 27 CFR part 5, not intended for sale as such but
for use in the manufacture of a distilled spirits product.
I.R.C. The Internal Revenue Code of 1954, as amended.
Kind. As applied to spirits, except as provided in Sec. 19.597, kind
shall mean class and type as prescribed in 27 CFR part 5. As applied to
wines, kind shall mean the classes and types of wines as prescribed in
27 CFR part 4.
Liquor bottle. A bottle made of glass or earthenware, or of other
suitable material approved by the Food and Drug Administration, which
has been designed or is intended for use as a container for distilled
spirits for sale for beverage purposes and which has been determined by
the Director to protect the revenue adequately.
Liter. A metric unit of capacity equal to 1,000 cubic centimeters of
alcoholic beverage, and equivalent to 33.814 fluid ounces. A liter is
divided into 1,000 milliliters. Milliliter or milliliters may be
abbreviated as ``ml.''
Lot identification. The lot identification described in Sec. 19.593.
Mash, wort, wash. Any fermented material capable of, or intended
for, use as a distilling material.
Nonindustrial use. As applied to spirits, shall have the meaning
ascribed in 27 CFR part 2.
Operating permit. The document issued pursuant to 26 U.S.C. 5171(d),
authorizing the person named therein to engage in the business or
operation described therein.
Package. A cask or barrel or similar wooden container, or a drum or
similar metal container.
Package identification number. The package identification number
described in Sec. 19.593.
Person. An individual, trust, estate, partnership, association,
company, or corporation.
Plant or distilled spirits plant. An establishment qualified under
this part for distilling, warehousing, processing or any combination
thereof.
Plant number. The number assigned to a distilled spirits plant by
the regional director (compliance).
Processor. Except as otherwise provided under 26 U.S.C. 5002(a)(6),
any person qualified under this part who manufactures, mixes, bottles,
or otherwise processes distilled spirits or denatured spirits, or
manufactures any article.
Proof. The ethyl alcohol content of a liquid at 60 degrees
Fahrenheit, stated
[[Page 268]]
as twice the percent of ethyl alcohol by volume.
Proof of distillation. The composite proof of the spirits at the
time the production gauge is made,or, if the spirits had been reduced in
proof prior to the production gauge, the proof of the spirits prior to
such reduction, unless the spirits are subsequently redistilled at a
higher proof than the proof prior to reduction.
Proof gallon. A gallon of liquid at 60 degrees Fahrenheit which
contains 50 percent by volume of ethyl alcohol having a specific gravity
of 0.7939 at 60 degrees Fahrenheit referred to water at 60 degrees
Fahrenheit as unity, or the alcoholic equivalent thereof.
Proprietor. The person qualified under this part to operate the
distilled spirits plant.
Reconditioning. The dumping of distilled spirits products in bond
after their bottling or packaging, for purposes other than destruction,
denaturation, redistillation, or rebottling. The term may include the
filtration, clarification, stabilization, or reformulation of a product.
Recovered article. An article containing specially denatured spirits
salvaged without all of its original ingredients, or an article
containing completely denatured alcohol salvaged without all of the
denaturants for completely denatured alcohol, under 27 CFR part 20.
Region. A Bureau of Alcohol, Tobacco and Firearms region.
Region director (compliance). The principal regional official
responsible for administering regulations in this part.
Season. The period from January 1 through June 30, is the spring
season, and the period from July 1 through December 31 is the fall
season.
Secretary. The Secretary of the Treasury or his delegate.
Service center. An Internal Revenue Service Center in any of the
Internal Revenue regions.
Spirits or distilled spirits. That substance known as ethyl alcohol,
ethanol, or spirits of wine in any form (including all dilutions and
mixtures thereof, from whatever source or by whatever process produced)
but not denatured spirits unless specifically stated. The term does not
include mixtures of distilled spirits and wine, bottled at 48 deg. proof
or less, if the mixture contains more than 50 percent wine on a proof
gallon basis.
Spirits residues. Residues, containing distilled spirits, of a
manufacturing process related to the production of an article under 27
CFR part 20.
Tax-determined or determined. When used with respect to the tax on
any distilled spirits to be withdrawn from bond on determination of tax,
shall mean that the taxable quantity of spirits has been established.
Taxpaid. When used with respect to distilled spirits shall mean that
all applicable taxes imposed by law in respect of such spirits have been
determined or paid as provided by law.
This chapter. Title 27, Code of Federal Regulations, Chapter I (27
CFR Chapter I).
Transfer in bond. The removal of spirits, denatured spirits and
wines from one bonded premises to another bonded premises.
Treasury Account. The Department of the Treasury's General Account
at the Federal Reserve Bank of New York.
Unfinished spirits. Spirits in the production system prior to
production gauge.
U.S.C. The United States Code.
Warehouseman. A proprietor of a distilled spirits plant qualified
under this part to store bulk distilled spirits.
Wine spirits. The term ``wine spirits'' means spirits authorized for
use in wine production by 26 U.S.C. 5373.
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50
FR 9160, Mar. 6, 1985; T.D. ATF-206, 50 FR 23951, June 7, 1985; T.D.
ATF-230, 51 FR 21748, June 16, 1986; T.D. ATF-297, 55 FR 18061, Apr. 30,
1990]
Subpart C--Taxes
Gallonage Taxes
Sec. 19.21 Tax.
(a) A tax is imposed by 26 U.S.C. 5001 and 7652 on all spirits
produced in, imported into or brought into the United States at the rate
prescribed in section 5001 on each proof gallon and a proportionate tax
at a like rate on all fractional parts of a proof gallon. Wines
containing more than 24 percent of alcohol by volume are taxed as
spirits.
[[Page 269]]
All products of distillation, by whatever name known, which contain
spirits, on which the tax imposed by law has not been paid, and any
alcoholic ingredient added to such products, are considered and taxed as
spirits.
(b) A credit against the tax imposed on distilled spirits by 26
U.S.C. 5001 or 7652 is allowable under 26 U.S.C. 5010 on each proof
gallon of alcohol derived from eligible wine or from eligible flavors
which do not exceed 2\1/2\ percent of the finished product on a proof
gallon basis. The credit is allowable at the time the tax is payable as
if it constituted a reduction in the rate of tax.
(c) Where credit against the tax is desired, the person liable for
the tax shall establish an effective tax rate in accordance with
Sec. 19.34. The effective tax rate established will be applied to each
withdrawal or other taxable disposition of the distilled spirits.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001);
Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010); Act
of August 16, 1954, Pub. L. 591, 68A Stat. 907, as amended (26 U.S.C.
7652)).
[T.D. ATF-297, 55 FR 18061, Apr. 30, 1990]
Sec. 19.22 Attachment of tax.
Under 26 U.S.C. 5001(b), the tax attaches to spirits as soon as the
substance comes into existence as such, whether it be subsequently
separated as pure or impure spirits, or be immediately, or at any
subsequent time, transferred into any other substance, either in the
process of original production, or by any subsequent process.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001))
Sec. 19.23 Lien.
Under 26 U.S.C. 5004, the tax becomes a first lien on the spirits
from the time the spirits come into existence as such. The conditions
under which the first lien shall be terminated are described in 26
U.S.C. 5004.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1317, as amended (26 U.S.C. 5004))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]
Sec. 19.24 Persons liable for tax.
(a) Distilling. 26 U.S.C. 5005 provides that the distiller of
spirits is liable for the tax and that each proprietor or possessor of,
and person in any manner interested in the use of, any still, distilling
apparatus, or distillery, shall be jointly and severally liable for the
tax on distilled spirits produced. However, a person, not an officer or
director of a corporate proprietor, owning or having the right of
control of not more than 10 percent of any class of stock of that
proprietor, is not liable by reason of the stock ownership or control.
Persons transferring spirits in bond so liable for the tax are relieved
of liability if
(1) The proprietors of transferring and receiving premises are
independent of each other and neither has a proprietary interest,
directly or indirectly, in the business of the other, and
(2) No person so liable for the tax on the spirits transferred
retains any interest in the spirits.
(b) Storage on bonded premises. 26 U.S.C. 5005(c) provides that each
person operating bonded premises shall be liable for the tax on all
spirits while the spirits are stored on the premises, and on all spirits
which are in transit to the premises from the time of removal from the
transferor's bonded premises, pursuant to an approved application.
Liability for the tax continues until the spirits are transferred or
withdrawn from bonded premises as authorized by law, or until the
liability for tax is relieved under the provisions of 26 U.S.C. 5008(a).
Claims for relief from liability for spirits lost are provided for in
Sec. 19.41. Voluntary destruction of spirits in bond is provided for in
subpart U of this part.
(c) Withdrawals without payment of tax. Under 26 U.S.C. 5005(e), any
person who withdraws spirits from the bonded premises of a plant without
payment of tax, as provided in 26 U.S.C. 5214, shall be liable for the
tax on the spirits from the time of withdrawal. The person shall be
relieved of any liability at the time the spirits are exported,
deposited in a foreign-trade zone, used in production of wine, deposited
in a customs bonded warehouse, laden as supplies upon or used in the
maintenance or repair of certain vessels or aircraft, or used for
certain research, development or testing, as provided by law.
[[Page 270]]
(d) Withdrawals free of tax. Persons liable for tax under paragraph
(a) of this section, are relieved of the liability on spirits withdrawn
from bonded premises free of tax under this part, at the time the
spirits are withdrawn.
(e) Withdrawn from customs custody without payment of tax. 26 U.S.C.
5232(a) provides that when imported distilled spirits in bulk containers
are withdrawn from customs custody and transferred to the bonded
premises of a distilled spirits plant without payment of the tax imposed
on imported distilled spirits by 26 U.S.C. 5001, the person operating
the bonded premises of the distilled spirits plant to which spirits are
transferred shall become liable for the tax on the spirits upon their
release from customs custody, and the importer shall thereupon be
relieved of liability for the tax.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1318, as amended (26 U.S.C. 5005);
Sec. 3, Pub. L. 90-630, 82 Stat. 1328, as amended (26 U.S.C. 5232); Sec.
3, Pub. L. 91-659, 84 Stat. 1965, as amended (26 U.S.C. 5066))
Sec. 19.25 Time for tax determination.
Except as otherwise provided in this part, the tax on spirits shall
be determined when the spirits are withdrawn from bond. The tax on
spirits which are to be withdrawn from bonded premises shall be
determined upon completion of the gauge for determination of tax and
before withdrawal from bonded premises.
(Sec. 201, Pub. L. 85-859, 72 Stat 1320, as amended (26 U.S.C. 5006))
Sec. 19.26 Tax on wine.
(a) Imposition of tax. A tax is imposed by 26 U.S.C. 5041 or 7652 on
wine (including imitation, substandard, or artificial wine, and
compounds sold as wine) produced in or imported or brought into the
United States. Proprietors of distilled spirits plants may become liable
for wine taxes under 26 U.S.C. 5362(b)(3) in connection with wine
transferred in bond to a distilled spirits plant. Wine may not be
removed from the bonded premises of a distilled spirits plant for
consumption or sale as wine.
(b) Liability for tax. Except as otherwise provided by law, the
liability for tax on wine transferred in bond from a bonded wine cellar
to a distilled spirits plant, or transferred in bond between distilled
spirits plants, will continue until the wine is used in a distilled
spirits product.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as amended, 1380, as amended
(26 U.S.C. 5041, 5362))
[T.D. ATF-297, 55 FR 18062, Apr. 30, 1990; 55 FR 23634, June 11, 1990]
Assessments
Sec. 19.31 Production not accounted for.
Where the regional director (compliance) finds that a distiller has
not accounted for all spirits produced by him, assessment shall be made
for the tax on the difference between the quantity reported and the
quantity found to have been actually produced.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended (26 U.S.C. 5006))
Sec. 19.32 Assessment of tax on spirits, denatured spirits,
or wines in
bond which are lost, destroyed or removed without
authorization.
When spirits, denatured spirits, or wines in bond are lost or
destroyed (except spirits, denatured spirits, or wines on which the tax
is not collectible by reason of the provisions of 26 U.S.C. 5008 (a) or
(d) or 26 U.S.C. 5370, as applicable) and the proprietor or other person
liable for the tax on the spirits, denatured spirits, or wines fails to
file a claim for remission as provided in Sec. 19.41(a) or when the
claim is denied, the tax shall be assessed. In any case where spirits,
denatured spirits, or wines in bond are removed from bonded premises
other than as authorized by law, the tax shall be assessed. In the case
of losses under circumstances described in 26 U.S.C. 5006(b) with
respect to packages of spirits or denatured spirits on bonded premises,
the tax shall be assessed if the tax is not paid upon the demand of the
regional director (compliance).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended, 1323, as amended,
1381, as amended (26 U.S.C. 5006, 5008, 5370))
[[Page 271]]
Effective Tax Rates
Source: Sections 19.34 through 19.38 added by T.D. ATF-297, 55 FR
18062, Apr. 30, 1990, unless otherwise noted.
Sec. 19.34 Computation of effective tax rate.
(a) The proprietor shall compute the effective tax rate for
distilled spirits containing eligible wine or eligible flavors as the
ratio of the numerator and denominator as follows:
(1) The numerator will be the sum of:
(i) The proof gallons of all distilled spirits used in the product
(exclusive of distilled spirits derived from eligible flavors),
multiplied by the tax rate prescribed by 26 U.S.C. 5001;
(ii) The wine gallons of each eligible wine used in the product,
multiplied by the tax rate prescribed by 26 U.S.C. 5041(b)(1), (2), or
(3), which would be imposed on the wine but for its removal to bonded
premises; and
(iii) The proof gallons of all distilled spirits derived from
eligible flavors used in the product, multiplied by the tax rate
prescribed by 26 U.S.C. 5001, but only to the extent that such distilled
spirits exceed 2\1/2\% of the denominator prescribed in paragraph (a)(2)
of this section.
(2) The denominator will be the sum of:
(i) The proof gallons of all distilled spirits used in the product,
including distilled spirits derived from eligible flavors; and
(ii) The wine gallons of each eligible wine used in the product,
multiplied by twice the percentage of alcohol by volume of each, divided
by 100.
(b) In determining the effective tax rate, quantities of distilled
spirits, eligible wine, and eligible flavors will be expressed to the
nearest tenth of a proof gallon. The effective tax rate may be rounded
to as many decimal places as the proprietor deems appropriate, provided
that, such rate is expressed no less exactly than the rate rounded to
the nearest whole cent, and the effective tax rates for all products
will be consistently expressed to the same number of decimal places. In
such case, if the number is less than five it will be dropped; if it is
five or over, a unit will be added.
(c) The following is an example of the use of the formula.
BATCH RECORD
Distilled spirits......................... 2249.1 proof gallons.
Eligible wine (14% alcohol by volume)..... 2265.0 wine gallons.
Eligible wine (19% alcohol by volume)..... 1020.0 wine gallons.
Eligible flavors.......................... 100.9 proof gallons.
2249.1($13.50)+2265.0($1.07)+1020($1.57)+16.6 \1\ ($13.50)
------------------------------------------------------------------ =
2249.1+100.9+(2265.0 x .28)+(1020 x .38)
$30,362.85+$2,423.55+$1,601.40+$224.10
------------------------------------------------------------------ =
2,350.0+634.2+387.6
$34,611.90
---------------- = $10.27, the effective tax
3,371.8 rate.
\1\ Proof gallons by which distilled spirits derived from eligible flavors exceed
2\1/2\%) of the total proof
gallons in the batch (100.9-(2\1/2\%) x 3,371.8=16.6).
(Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))
[T.D. ATF-297, 55 FR 18062, Apr. 30, 1990, as amended by T.D. ATF-307,
52736, Dec. 21, 1990]
Sec. 19.35 Application of effective tax rate (Actual).
Any proprietor who does not apply effective tax rates to taxable
removals in accordance with Sec. 19.36, 19.37 or 19.38 shall establish
an effective tax rate for
[[Page 272]]
each batch of distilled spirits in the processing account on which
credit against tax is desired for alcohol derived from eligible wine or
eligible flavors. The effective tax rate will be computed in accordance
with Sec. 19.34 and will be recorded on the dump or batch record for the
product, as required by Sec. 19.748. The serial numbers of the cases
removed at such rate shall be recorded on the record of tax
determination prescribed in Sec. 19.761 or other related record
available for examination by any ATF officer.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201, Pub.
L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201); Sec 6, Pub. L.
96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))
Sec. 19.36 Standard effective tax rate.
(a) The proprietor may establish a permanent standard effective tax
rate for any eligible distilled spirits product based on the least
quantity and the lowest alcohol content of eligible wine or eligible
flavors used in the manufacture of the product. The permanent standard
effective tax rate must equal the highest tax rate applicable to the
product. The proprietor shall maintain a permanent record of the
standard effective tax rate established for each product in accordance
with Sec. 19.765. Whenever the proprietor manufactures a batch of the
product with a lesser quantity or lower alcohol content of eligible wine
or eligible flavor, he shall keep the cased goods segregated from other
completed cases of the same product and shall tax determine the product
in accordance with Sec. 19.35.
(b) If the regional director (compliance) finds that the use of this
procedure jeopardizes the revenue or causes administrative difficulty,
the proprietor shall discontinue the use of the procedure.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201, Pub.
L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201); Sec. 6, Pub. L.
96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))
Sec. 19.37 Average effective tax rate.
(a) The proprietor may establish an average effective tax rate for
any eligible distilled spirits product based on the total proof gallons
in all batches of the same composition which have been produced during
the preceding 6-month period and which have been or will be bottled or
packaged, in whole or in part, for domestic consumption. At the
beginning of each month, the proprietor shall recompute the average
effective tax rate so as to include only the immediately preceding 6-
month period. The average effective tax rate established for a product
will be shown in the record of average effective tax rates prescribed in
Sec. 19.763.
(b) If the regional director (compliance) finds that the use of this
procedure jeopardizes the revenue or causes administrative difficulty,
the proprietor shall discontinue the use of this procedure.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201, Pub.
L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201); Sec. 6, Pub. L.
96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))
Sec. 19.38 Inventory reserve account.
(a) The proprietor may establish an inventory reserve account for
any eligible distilled spirits product by maintaining an inventory
reserve record as prescribed by 19.764. The effective tax rate applied
to each removal or other disposition will be the effective tax rate
recorded on the inventory reserve record from which the removal or other
disposition is depleted.
(b) If the regional director (compliance) finds that the use of this
procedure jeopardizes the revenue or causes administrative difficulty,
the proprietor shall discontinue the use of this procedure.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201, Pub.
L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201); Sec. 6, Pub. L.
96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))
Claims
Sec. 19.41 Claims on spirits, denatured spirits, articles,
or wines
lost or destroyed in bond.
(a) Claims for remission. All claims for remission of tax required
by this part, relating to the destruction or loss of spirits, denatured
spirits, articles, or wines in bond, shall be filed with the regional
director (compliance) and shall set forth the following:
(1) Identification (including serial numbers if any) and location of
the container or containers from which the
[[Page 273]]
spirits, denatured spirits, articles, or wines were lost, or removed for
destruction;
(2) Quantity of spirits, denatured spirits, articles, or wines lost
or destroyed from each container, and the total quantity of spirits or
wines covered by the claim;
(3) Total amount of tax for which the claim is filed;
(4) Name, number, and address of the plant from which withdrawn
without payment of tax or removed for transfer in bond (if claim
involves spirits so withdrawn or removed or if claim involves wines
transferred in bond) and date and purpose of such withdrawal or removal,
except that in the case of imported spirits lost or destroyed while
being transferred from customs custody to ATF bond as provided in
Sec. 19.481, the name of the customs warehouse, if any, and port of
entry will be given instead of the plant name, number, and address;
(5) Date of the loss or destruction (or, if not known, date of
discovery), the cause or nature thereof, and all the facts relative
thereto;
(6) Name of the carrier, where a loss in transit is involved;
(7) The name and address of the consignee, in the case of spirits
withdrawn without payment of tax which are lost before being used for
research, development or testing;
(8) If lost by theft, facts establishing that the loss did not occur
as the result of any negligence, connivance, collusion or fraud on the
part of the proprietor of the plant, owner, consignor, consignee,
bailee, or carrier, or the employees or agents of any of them;
(9) In the case of a loss by theft, whether the claimant is
indemnified or recompensed for the spirits or wines lost and if so, the
amount and nature of indemnity or recompense and the actual value of the
spirits or wines, less the tax.
(b) Claims for abatement, credit or refund. Claims for abatement of
an assessment, or for credit or refund of tax which has been paid or
determined, for spirits, denatured spirits, articles, or wines lost or
destroyed in bond shall be filed with the regional director
(compliance). The claims shall set forth the information required under
paragraph (a) of this section and, in addition, shall set forth--
(1) The date of assessment or payment (or of tax determination, if
the tax has not been assessed or paid) of the tax for which abatement,
credit or refund is claimed, and
(2) The name, plant number, and the address of the plant where the
tax was determined, paid, or assessed (or name, address and capacity of
any other person who paid or was assessed the tax, if the tax was not
paid by or assessed against a proprietor).
(c) Supporting document. (1) Claims under paragraphs (a) and (b) of
this section shall be supported (whenever possible) by affidavits of
persons having personal knowledge of the loss or destruction. For claims
on spirits, denatured spirits, articles, or wines lost while being
transferred by carrier, the claim shall be supported by a copy of the
bill of lading.
(2) For claims pertaining to losses of spirits withdrawn without
payment of tax and lost prior to being used for research, development or
testing, the claim shall be supported by a copy of the proprietor's
sample record prescribed in subpart W of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1381, as amended
(26 U.S.C. 5008, 5370))
Sec. 19.42 Claims on spirits returned to bonded premises.
(a) Claims for credit or refund of tax on spirits which have been
withdrawn from bonded premises on payment or determination of tax and
which are returned under 26 U.S.C. 5215 shall be filed with the regional
director (compliance) and shall set forth the following:
(1) Quantity of spirits so returned;
(2) Amount of tax for which the claim is filed;
(3) Name, address, and plant number of the plant to which the
spirits were returned and the date of the return;
(4) The purpose for which returned; and
(5) The serial number of the gauge record on which the spirits were
returned.
(b) If the alcoholic content of the spirits contain at least 92
percent Puerto Rican or Virgin Islands rum, or if
[[Page 274]]
the spirits contain rum imported from any area other than Puerto Rico
and the Virgin Islands, the claim shall show:
(1) Proof gallons of the finished product derived from Puerto Rican
or Virgin Islands spirits, or derived from rum imported from any other
area; and
(2) The amount of tax imposed by 26 U.S.C. 7652 or 26 U.S.C. 5001,
determined at the time of withdrawal from bond, on the Puerto Rican or
Virgin Islands spirits, or on the rum imported from any other area,
contained in the product.
(c) Claims for credit or refund of tax on spirits containing
eligible wine or eligible flavors must set forth the date and serial
number of the record of tax determination and the effective tax rate at
which the tax was paid or determined. If this information is not
provided, the amount of tax claimed will be based on the lowest
effective tax rate applied to the product.
(d) Claims for credit or refund of tax shall be filed by the
proprietor of the plant to which the spirits were returned within six
months of the date of the return. No interest is allowed on any claims
for refund or credit.
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-233, 51
FR 28077, Aug. 5, 1986; T.D. ATF-297, 55 FR 18063, Apr. 30, 1990]
Sec. 19.43 Claims relating to spirits lost after tax determination.
Claims for abatement, credit, or refund of tax under this part,
relating to losses of spirits occurring on bonded premises after tax
determination but prior to physical removal from such premises, shall be
prepared and filed as provided in, and contain the information called
for under Sec. 19.41(b) and be supported by documents as provided under
Sec. 19.41(c).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008))
Sec. 19.44 Execution of claims and supporting documents.
All claims filed under this part shall be filed on Form 2635
(5620.8). Claims for abatement, remission, credit, or refund shall (a)
show the name, address, and capacity of the claimant, (b) be signed by
the claimant or his duly authorized agent, and (c) be executed under the
penalties of perjury as provided in Sec. 19.100. Supporting documents
required by this part to be submitted with a claim shall be attached to
the claim and shall be deemed to be a part thereof. The regional
director (compliance) may require the submission of additional evidence
in support of any claim filed under this part when deemed necessary for
proper action on the claim.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008);
Sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985; T.D.
ATF-251, 52 FR 19313, May 22, 1987]
Sec. 19.45 Claims for credit of tax.
Claims for credit of tax, as provided in this part, may be filed
after determination of the tax whether or not the tax has been paid. The
claimant may not anticipate allowance of a credit or make an adjusting
entry in a tax return pending action on the claim.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008);
Sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))
Sec. 19.46 Adjustments for credited tax.
When notification of allowance of credit is received from the
regional director (compliance), including notification of credit for tax
on spirits exported with benefit of drawback as provided in 27 CFR part
252, the claimant shall make an adjusting entry and explanatory
statement (specifically identifying the notification of allowance of
credit) in the next excise tax return (or returns) to the extent
necessary to exhaust the credit.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1336, as amended
(26 U.S.C. 5008, 5062))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50
FR 51387, Dec. 17, 1985]
Subpart Ca--Special (Occupational) Taxes
Source: T.D. ATF-271, 53 FR 17541, May 17, 1988, unless otherwise
noted.
[[Page 275]]
Sec. 19.49 Liability for special tax.
(a) Proprietor of distilled spirits plant--(1) General. Except as
provided in Sec. 19.906, every proprietor of a distilled spirits plant
shall pay a special (occupational) tax at a rate specified by
Sec. 19.50. The tax shall be paid on or before the date
of commencing
business as a distilled spirits plant proprietor, and thereafter every
year on or before July 1. On commencing business, the tax shall be
computed from the first day of the month in which liability is incurred,
through the following June 30. Thereafter, the tax shall be computed for
the entire year (July 1 through June 30).
(2) Transition rule. For purposes of paragraph (a)(1) of this
section, a proprietor engaged in distilled spirits plant operations on
January 1, 1988, shall be treated as having commenced business on that
date. The special tax imposed by this transition rule shall cover the
period January 1, 1988, through June 30, 1988, and shall be paid on or
before April 1, 1988.
(b) Liquor Dealer--(1) General. A proprietor of a distilled spirits
plant shall be subject to or exempt from a liquor dealer's special
(occupational) tax as provided in part 194 of this chapter.
(2) Exemption for sales by a proprietor of a distilled spirits
plant. A proprietor of a distilled spirits plant is not required to pay
special tax as a wholesale or retail dealer in liquor because of sales,
at the principal place of business or at the distilled spirits plant, of
liquor which at the time of sale is stored at the distilled spirits
plant or which had been removed and stored in a taxpaid storeroom
operated in connection with the distilled spirits plant. Each proprietor
of a distilled spirits plant shall have only one exemption from dealer's
special tax for each distilled spirits plant. The distiller may
designate, in writing to the regional director (compliance), that the
principal place of business will be exempt from dealer's special tax;
otherwise, the exemption will apply to the distilled spirits plant.
(c) Each place of business taxable--(1) General. A proprietor of a
distilled spirits plant incurs special tax liability at each place of
business in which an occupation subject to special tax is conducted. A
place of business means the entire office, plant or area of the business
in any one location under the same proprietorship. Passageways, streets,
highways, rail crossings, waterways, or partititions dividing the
premises are not sufficient separation to require additional special
tax, if the divisions of the premises are otherwise contiguous.
(2) Exception for contiguous areas. A proprietor of a distilled
spirits plant does not incur additional special tax liability for sales
of liquor made at a location other than on distilled spirits plant
premises described on the notice of registration, Form 5110.41, if the
location where such sales are made is contiguous to the distilled
spirits plant premises in the manner described in paragraph (c)(1) of
this section.
(26 U.S.C. 5081, 5111, 5113, 5142, 5143)
[T.D. ATF-271, 53 FR 17541, May 17, 1988, as amended by T.D. ATF-285, 54
FR 12609, Mar. 28, 1989]
Sec. 19.50 Rates of special tax.
(a) General. Title 26 U.S.C. 5081(a)(1) imposes a special tax of
$1,000 per year on every proprietor of a distilled spirits plant.
(b) Reduced rate for small proprietors. Title 26 U.S.C. 5081(b)
provides for a reduced rate of $500 per year with respect to any
distilled spirits plant proprietor whose gross receipts (for the most
recent taxable year ending before the first day of the taxable period to
which the special tax imposed by Sec. 19.49 relates) are less than
$500,000. The ``taxable year'' to be used for determining gross receipts
is the taxpayer's income tax year. All gross receipts of the taxpayer
shall be included, not just the gross receipts of the business subject
to special tax. Proprietors of new businesses that have not yet begun a
taxable year, as well as proprietors of existing businesses that have
not yet ended a taxable year, who commence a new activity subject to
special tax, qualify for the reduced special (occupational) tax rate,
unless the business is a member of a ``controlled group''; in that case,
the rules of paragraph (c) of this section shall apply.
(c) Controlled group. All persons treated as one taxpayer under 26
U.S.C.
[[Page 276]]
5061(e)(3) shall be treated as one taxpayer for the purpose of
determining gross receipts under paragraph (b) of this section.
``Controlled group'' means a controlled group of corporations, as
defined in 26 U.S.C. 1563 and implementing regulations in 26 CFR 1.1563-
1 through 1.1563-4, except that the words ``at least 80 percent'' shall
be replaced by the words ``more than 50 percent'' in each place they
appear in subsection (a) of 26 U.S.C. 1563, as well as in the
implementing regulations. Also, the rules for a ``controlled group of
corporations'' apply in a similar fashion to groups which include
partnerships and/or sole proprietorships. If one entity maintains more
than 50% control over a group consisting of corporations and one, or
more, partnerships and/or sole proprietorships, all of the members of
the controlled group are one taxpayer for the purpose of this section.
(d) Short taxable year. Gross receipts for any taxable year of less
than 12 months shall be annualized by multiplying the gross receipts for
the short period by 12 and dividing the result by the number of months
in the short period, as required by 26 U.S.C. 448(c)(3).
(e) Returns and allowances. Gross receipts for any taxable year
shall be reduced by returns and allowances made during that year under
26 U.S.C. 448(c)(3).
(26 U.S.C. 448, 5061, 5081)
Sec. 19.51 Special tax returns.
(a) General. Special tax shall be paid by return. The prescribed
return is ATF Form 5630.5, Special Tax Registration and Return. Special
tax returns, with payment of tax, shall be filed with ATF in accordance
with instructions on the form.
(b) Preparation of ATF Form 5630.5. All of the information called
for on Form 5630.5 shall be provided, including:
(1) The true name of the taxpayer.
(2) The trade name(s) (if any) of the business(es) subject to
special tax.
(3) The employer identification number (see Sec. 19.52).
(4) The exact location of the place of business, by name and number
of building or street, or if these do not exist, by some description in
addition to the post office address. In the case of one return for two
or more locations, the address to be shown shall be the taxpayer's
principal place of business (or principal office, in the case of a
corporate taxpayer).
(5) The class(es) of special tax to which the taxpayer is subject.
(6) Ownership and control information: that is, the name, position,
and residence address of every owner of the business and of every person
having power to control its management and policies with respect to the
activity subject to special tax. ``Owner of the business'' shall include
every partner, if the taxpayer is a partnership, and every person owning
10% or more of its stock, if the taxpayer is a corporation. However, the
ownership and control information required by this paragraph need not be
stated if the same information has been previously provided to ATF in
connection with a permit application, and if the information previously
provided is still current.
(c) Multiple locations and/or classes of tax. A taxpayer subject to
special tax for the same period at more than one location or for more
than one class of tax shall--
(1) File one special tax return, ATF Form 5630.5, with payment of
tax, to cover all such locations and classes of tax; and
(2) Prepare, in duplicate, a list identified with the taxpayer's
name, address (as shown on ATF Form 5630.5), employer identification
number, and period covered by the return. The list shall show, by
States, the name, address, and tax class of each location for which
special tax is being paid. The original of the list shall be filed with
ATF in accordance with instructions on the return, and the copy shall be
retained at the taxpayer's principal place of business (or principal
office, in the case of a corporate taxpayer) for the period specified in
Sec. 19.723(c).
(d) Signing of ATF Forms 5630.5--(1) Ordinary returns. The return of
an individual proprietor shall be signed by the individual. The return
of a partnership shall be signed by a general partner. The return of a
corporation shall be signed by any officer. In each case, the person
signing the return shall designate his or her capacity as ``individual
owner,'' ``member of firm,'' or, in
[[Page 277]]
the case of a corporation, the title of the officer.
(2) Fiduciaries. Receivers, trustees, assignees, executors,
administrators, and other legal representatives who continue the
business of a bankrupt, insolvent, deceased person, etc., shall indicate
the fiduciary capacity in which they act.
(3) Agent or attorney in fact. If a return is signed by an agent or
attorney in fact, the signature shall be preceded by the name of the
principal and followed by the title of the agent or attorney in fact. A
return signed by a person as agent will not be accepted unless there is
filed, with the ATF office with which the return is required to be
filed, a power of attorney authorizing the agent to perform the act.
(4) Perjury statement. ATF Forms 5630.5 shall contain or be verified
by a written declaration that the return has been executed under the
penalties of perjury.
(26 U.S.C. 6061, 6065, 6151, 7011)
Sec. 19.52 Employer identification number.
(a) Requirement. The employer identification number (defined in 26
CFR 301.7701-12) of the taxpayer who has been assigned such a number
shall be shown on each special tax return, including amended returns,
filed under this subpart. Failure of the taxpayer to include the
employer identification number may result in the imposition of the
penalty specified in Sec. 70.113 of this chapter.
(b) Application for employer identification number. Each taxpayer
who files a special tax return, who has not already been assigned an
employer identification number, shall file IRS Form SS-4 to apply for
one. The taxpayer shall apply for and be assigned only one employer
identification number, regardless of the number of places of business
for which the taxpayer is required to file a special tax return. The
employer identification number shall be applied for no later than 7 days
after the filing of the taxpayer's first special tax return. IRS Form
SS-4 may be obtained from the director of an IRS service center or from
any IRS district director.
(c) Preparation and filing of IRS Form SS-4. The taxpayer shall
prepare and file IRS Form SS-4, together with any supplementary
statement, in accordance with the instructions on the form or issued in
respect to it.
(26 U.S.C. 6109)
[T.D. ATF-271, 53 FR 17541, May 17, 1988, as amended by T.D. ATF-301, 55
FR 47605, Nov. 14, 1990]
Special Tax Stamps
Sec. 19.53 Issuance, distribution, and examination of special
tax
stamps.
(a) Issuance of special tax stamps. Upon filing a properly executed
return on ATF Form 5630.5, together with the full remittance, the
taxpayer will be issued an appropriately designated special tax stamp.
If the return covers multiple locations, the taxpayer will be issued one
appropriately designated stamp for each location listed on the
attachment required by Sec. 19.51(c), but showing, as to name and
address, only the name of the taxpayer and the address of the taxpayer's
principal place of business (or principal office in the case of a
corporate taxpayer).
(b) Distribution of special tax stamps for multiple locations. On
receipt of the special tax stamps, the taxpayer shall verify that there
is one stamp for each location listed on the attachment to ATF Form
5630.5. The taxpayer shall designate one stamp for each location and
shall type on each stamp the address of the business conducted at the
location for which that stamp is designated. The taxpayer shall then
forward each stamp to the place of business designated on the stamp.
(c) Examination of special tax stamps. All stamps denoting payment
of special tax shall be kept available for inspection by ATF officers,
at the location for which designated, during business hours.
(26 U.S.C. 5146, 6806)
Sec. 19.54 Changes in special tax stamps.
(a) Change in name. If there is a change in the corporate or firm
name, or in the trade name, as shown on Form 5630.5, the proprietor
shall file an amended special tax return as soon as practicable after
the change, covering the new corporate or firm name, or
[[Page 278]]
trade name. No new special tax is required to be paid. The proprietor
shall attach the special tax stamp for endorsement of the change in
name.
(b) Change in proprietorship--(1) General. If there is a change in
the proprietorship of a distilled spirits plant, the successor shall pay
a new special tax and obtain the required special tax stamps.
(2) Exemption for certain successors. Persons having the right of
succession provided for in paragraph (c) of this section may carry on
the business for the remainder of the period for which the special tax
was paid, without paying a new special tax, if within 30 days after the
date on which the successor begins to carry on the business, the
successor files a special tax return on ATF Form 5630.5 with ATF, which
shows the basis of succession. A person who is a successor to a business
for which special tax has been paid and who fails to register the
succession is liable for special tax computed from the first day of the
calendar month in which he or she began to carry on the business.
(c) Persons having right of succession. Under the conditions
indicated in paragraph (b)(2) of this section, the right of succession
will pass to certain persons in the following cases:
(1) Death. The widowed spouse or child, or executor, administrator,
or other legal representative of the taxpayer;
(2) Succession of spouse. A husband or wife succeeding to the
business of his or her spouse (living);
(3) Insolvency. A receiver or trustee in bankruptcy, or an assignee
for benefit of creditors;
(4) Withdrawal from firm. The partner or partners remaining after
death or withdrawal of a member.
(d) Change in location. If there is a change in location of a
taxable place of business, the proprietor shall, within 30 days after
the change, file with ATF an amended special tax return covering the new
location. The proprietor shall attach the special tax stamp or stamps,
for endorsement of the change in location. No new special tax is
required to be paid. However, if the proprietor does not file the
amended return within 30 days, the proprietor is required to pay a new
special tax and obtain a new special tax stamp.
(26 U.S.C. 5143, 7011)
Subpart D--Administrative and Miscellaneous Provisions
Activities Not Subject to This Part
Sec. 19.57 Recovery and reuse of denatured spirits in manufacturing
processes.
The following persons are not, by reason of the activities listed
below, subject to the provisions of this part, but they shall comply
with the provisions of part 20 of this chapter relating to the use and
recovery of spirits or denatured spirits:
(a) Manufacturers who use denatured spirits, or articles or
substances containing denatured spirits, in a process wherein any part
or all of the spirits, including denatured spirits, are recovered.
(b) Manufacturers who use denatured spirits in the production of
chemicals which do not contain spirits but which are used on the permit
premises in the manufacture of other chemicals resulting in spirits as a
by-product.
(c) Manufacturers who use chemicals or substances which do not
contain spirits or denatured spirits (but which were manufactured with
specially denatured spirits) in a process resulting in spirits as a by-
product.
(Sec 201, Pub. L. 85-859, 72 Stat. 1372, as amended (26 U.S.C. 5273))
[T.D. ATF-379, 61 FR 31425, June 20, 1996]
Sec. 19.58 Use of taxpaid distilled spirits to manufacture
products
unfit for beverage use.
(a) General. Apothecaries, pharmacists, and manufacturers are not
required to qualify as processors under 26 U.S.C. 5171 before
manufacturing or compounding the following products, if the tax has been
paid or determined on all of the distilled spirits contained therein:
(1) Medicines, medicinal preparations, food products, flavors,
flavoring extracts, and perfume, conforming to the standards for
approval of nonbeverage drawback products found in Secs. 17.131-17.137
of this chapter, whether
[[Page 279]]
or not drawback is actually claimed on those products. Except as
provided in paragraph (c) of this section, a formula need not be
submitted if drawback is not desired.
(2) Patented, patent, and proprietary medicines that are unfit for
use for beverage purposes.
(3) Toilet, medicinal, and antiseptic preparations and solutions
that are unfit for use for beverage purposes.
(4) Laboratory reagents, stains, and dyes that are unfit for use for
beverage purposes.
(5) Flavoring extracts, syrups, and concentrates that are unfit for
use for beverage purposes.
(b) Exceptions; products classed as beverages. Products specified
under part 17 of this chapter as being fit for beverage use are
alcoholic beverages. Bitters, patent medicines, and similar alcoholic
preparations which are fit for beverage purposes, although held out as
having certain medicinal properties, are also alcoholic beverages. Such
products are required to be manufactured on the bonded premises of a
distilled spirits plant, and are subject to the provisions of this part.
(c) Formulas and samples; when required. On request of the Director,
or when in doubt as to the classification of a product, the manufacturer
shall submit to the Director the formula for and a sample of the product
for examination to verify the manufacturer's claim of exemption from
qualification requirements.
(d) Change of formula; when required. If the regional director
(compliance) finds at any time that any product manufactured under
paragraph (a) of this section is being used for beverage purposes, or
for mixing with beverage spirits other than by a processor, he or she
shall notify the manufacturer to desist from manufacturing the product
until the formula is changed to make the product not susceptible of
beverage use and the change is approved by the Director. (However, the
provisions of this paragraph shall not prohibit such products, which are
unfit for beverage use, from being used in small quantities for
flavoring drinks at the time of serving for immediate consumption.)
Where, pursuant to notice, the manufacturer does not desist, or the
formula is not so modified as to make the product unsusceptible of
beverage use, the manufacturer shall immediately qualify as a processor.
(Sec. 805, Pub. L. 96-39, 93 Stat. 275, 278 (26 U.S.C. 5002, 5171))
[T.D. ATF-379, 61 FR 31425, June 20, 1996]
Authorities of the Director
Sec. 19.61 Form prescribed.
(a) The Director is authorized to prescribe all forms required by
this part. All of the information required by each form shall be
furnished, as indicated by the headings on the form and the instructions
thereon or issued in respect thereto, and as required by this part.
(b) Requests for forms should be mailed to the ATF Distribution
Center, 7943 Angus Court, Springfield, Virginia 22153.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. 372, 61 FR
20724, May 8, 1996]
Sec. 19.62 Alternate methods or procedures.
The proprietor, on specific approval by the Director as provided in
this paragraph, may use an alternate method or procedure in lieu of a
method or procedure specifically prescribed in this part. The Director
may approve an alternate method or procedure, subject to stated
conditions, when he finds that--
(a) Good cause has been shown for the use of the alternate method or
procedure;
(b) The alternate method or procedure is within the purpose of, and
consistent with the effect intended by, the specifically prescibed
method or procedure, and affords equivalent security to the revenue; and
(c) The alternate method or procedure will not be contrary to any
provision of law, and will not result in an increase in cost to the
Government or hinder the effective administration of this part. No
alternate method or procedure relating to the giving of any bond or to
the assessment, payment, or collection of tax, shall be authorized under
this paragraph. Where the proprietor desires to employ an alternate
[[Page 280]]
method or procedure, he shall submit a written application to do so to
the regional director (compliance), for transmittal to the Director. The
application shall specifically describe the proposed alternate method or
procedure, and shall set forth the reasons therefor. Alternate methods
or procedures shall not be employed until the application has been
approved by the Director. The proprietor shall, during the period of
authorization of an alternate method or procedure, comply with the terms
of the approved application. Authorization for any alternate method or
procedure may be withdrawn whenever in the judgment of the Director the
revenue is jeopardized or the effective administration of this part is
hindered by the continuation of such authorization. As used in this
paragraph, alternate methods or procedures shall include alternate
construction or equipment.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended, 1395, as amended
(26 U.S.C. 5178, 5552))
Sec. 19.63 Pilot operations.
The Director may waive any regulatory provisions of 26 U.S.C.
Chapter 51, and of the regulations in this part, for temporary pilot or
experimental operations for the purpose of facilitating the development
and testing of improved methods of governmental supervision (necessary
for the protection of the revenue) over plants. For this purpose, the
Director may, with the approval of the proprietor thereof, designate any
plant for such operations. The provision of law and regulations waived
and the period of time during which such waiver shall continue shall be
stated in writing by the Director. The provisions of this section shall
not be construed as authority to waive the filing of any bond or the
payment of any tax, including special (occupational) tax, provided for
in 26 U.S.C. Chapter 51.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5554))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-271 53
FR 17543, May 17, 1988]
Sec. 19.64 [Reserved]
Sec. 19.65 Experimental distilled spirits plants.
The Director may authorize the establishment and operation of
experimental plants for specific and limited periods of time solely for
experimentation in, or development of--
(a) Sources of materials from which spirits may be produced;
(b) Processes by which spirits may be produced or refined; or
(c) Industrial uses of spirits.
The Director may waive any provision of 26 U.S.C. Chapter 51 (other than
26 U.S.C. 5312) and of this part (other than this section and
Sec. 19.66) to the extent he deems necessary to effectuate the purposes
of 26 U.S.C. 5312(b), except that he may not waive the payment of any
tax on spirits removed from such plant. A proprietor of an experimental
distilled spirits plant established under this section is subject to
special (occupational) tax under subpart Ca of this part and shall hold
a separate special tax stamp to cover the experimental operations.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C. 5312))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-271 53
FR 17543, May 17, 1988]
Sec. 19.66 Application to established experimental plants.
Any person desiring to establish an experimental plant shall make
written application to the Director, through the regional director
(compliance), and obtain the Director's approval of the proposed
establishment. The applicant shall file with such application a bond in
such form and penal sum as required by the Director. The application
shall state the nature, extent, and purpose of the operations to be
conducted and describe the operations and equipment, the location of the
plant (including the proximity to other premises or operations subject
to the provisions of 26 U.S.C. Chapter 51) and the security measures to
be provided. The Director may require the submission of additional
information as he deems necessary. The regional director (compliance)
shall not permit operations until he has found that the plant conforms
[[Page 281]]
to the specifications set forth in the application, as approved, and the
applicant has complied with provisions of 26 U.S.C. Chapter 51, and this
part not specifically waived by the Director.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C. 5312))
Sec. 19.67 Spirits produced in industrial processes.
(a) Applicability. (1) Persons who produce spirits in industrial
processes (including spirits produced as a by-product in connection with
chemical or other processes) are distillers and are required to qualify
and pay special (occupational) tax under provisions of 26 U.S.C. Chapter
51 and this part.
(2) The Director may, however, waive any provision of 26 U.S.C.
Chapter 51, or of this part, with respect to the production of
nonpotable chemical mixtures containing spirits, including any provision
relating to qualification (except the payment of special (occupational)
tax), if such mixtures are produced:
(i) For transfer to the bonded premises of a distilled spirits plant
for completion of distilling; or
(ii) As a by-product which would require expensive and complex
equipment for the recovery of spirits.
(3) The waiver under the provisions of paragraph (a)(2)(ii) of this
section is further conditioned that such mixture would:
(i) Be destroyed on the premises where produced; or
(ii) Contain a minimum quantity of spirits practicable with the
procedure employed, not be subjected to further operations solely for
the purification or recovery of spirits, and be found by the Director to
be as nonpotable and at least as difficult with respect to recovery as
completely denatured alcohol.
(b) Application for waiver. (1) When the producer of nonpotable
mixtures desires to secure a waiver of designated provisions of 26
U.S.C. Chapter 51, or this part, he shall file an application with the
Director through the regional director (compliance).
(2) The application shall include, as applicable--
(i) Name and address of producer;
(ii) Chemical composition and source of the nonpotable mixture;
(iii) Approximate percentages of chemicals and spirits in the
mixture;
(iv) Method of operation proposed;
(v) Bonded premises where the mixture will be distilled; and
(vi) Other pertinent information required by the Director.
(c) Approval. If the Director finds that the waiver of the
requirements, or any of them, will not jeopardize the revenue and will
not unduly hinder supervision of the operations, he may approve the
application under such terms and conditions as he deems advisable and
subject to the furnishing of any bond which he deems necessary.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-271 53
FR 17543, May 17, 1988]
Sec. 19.68 Other businesses.
The Director may authorize the carrying on of other businesses (not
specifically prohibited by 26 U.S.C. 5601(a)(6)) on premises of plants
if he finds that those businesses will not jeopardize the revenue,
hinder the effective administration of this part, or be contrary to law.
The authorization will designate the premises (i.e., bonded or general)
on which such other business is to be conducted.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))
Sec. 19.70 Exemptions to meet the requirements of National
defense.
The Director may temporarily exempt proprietors from any provision
of the internal revenue laws or this part relating to spirits except
those requiring payment of tax thereon whenever in his judgement it is
expedient to do so to meet the requirements of the National defense.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1397, as amended (26 U.S.C. 5561))
Sec. 19.71 Experimental or research operations by scientific
institutions and colleges of learning.
(a) General. The Director may authorize any scientific university,
college of learning, or institution of scientific research to produce,
receive, blend, treat,
[[Page 282]]
test, and store spirits, without payment of tax, for experimental or
research use but not for consumption (other than organoleptic tests) or
sale, in quantities as may be reasonably necessary for such purposes.
The Director may waive any provision of 26 U.S.C. Chapter 51 (other than
26 U.S.C. 5312), or this part (other than this section) to the extent
necessary to effect the purposes of 26 U.S.C. 5312(a), except he may not
waive the payment of any tax on distilled spirits removed from any
university, college, or institution. A person conducting experimental or
research operations authorized under this section is subject to special
(occupational) tax under subpart Ca of this part and shall hold a
special tax stamp to cover the experimental or research operations.
(b) Qualification. Any university, college, or institution desiring
to conduct any of the experimental or research operations listed in the
preceding paragraphs shall make written application, to the Director,
through the regional director (compliance), and obtain the Director's
approval of the proposed operations. The applicant shall file with the
application a bond in a form and penal sum as required by the Director.
The application shall state the nature, extent, and purpose of the
operations to be conducted and describe the operations and equipment,
the location at which operations will be conducted (including
identification of the building or buildings, or the portions thereof to
be used), and the security measures to be provided. The Director may
require any additional information. Operations shall not be commenced
until authorized by the Director.
(c) Records. Reports concerning the operations need not be submitted
unless required by the Director, but records of the quantities of
spirits produced, received, and used each day shall be made and retained
for inspection by ATF officers.
(d) Discontinuance of operations. When operations authorized by the
Director are discontinued, all remaining spirits shall be disposed of by
destruction. When these spirits have been destroyed, notice of the
discontinuance of operations shall be given to the regional director
(compliance).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C. 5312))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-271, 53
FR 17543, May 17, 1988]
Authorities of the Regional Director (Compliance)
Sec. 19.72 Other businesses.
Application to conduct at a distilled spirits plant a type of
business other than that of a distiller, warehouseman, or processor may
be approved by the regional director (compliance) if the Director has,
as provided in Sec. 19.68, authorized the carrying on of a business of
the type proposed, unless the regional director (compliance) finds that
there are particular conditions in respect to the applicant's plant that
would cause the carrying on of such business to be a jeopardy to the
revenue or a hindrance to the effective administration of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))
Sec. 19.73 Emergency variations from requirements.
The regional director (compliance) may approve construction,
equipment, and methods of operation other than as specified in this
part, where he finds that an emergency exists and the proposed
variations from the specified requirements are necessary, and the
proposed variations--
(a) Will afford the security and protection to the revenue intended
by the prescribed specifications;
(b) Will not hinder the effective administration of this part; and
(c) Will not be contrary to any provisions of law.
Variations from requirements granted under this paragraph are
conditioned on compliance with the procedures, conditions, and
limitations with respect thereto set forth in the approval of the
application. Failure to comply in good faith with such procedures,
conditions, and limitations shall automatically terminate the authority
for such variations and the proprietor thereupon shall fully comply with
the
[[Page 283]]
prescribed requirements of regulations from which the variations were
authorized. Authority for any variation may be withdrawn whenever in the
judgement of the regional director (compliance) the revenue is
jeopardized or the effective administration of this part is hindered by
the continuation of such variation. Where the proprietor desires to
employ such variation, he shall submit a written application to do so to
the regional director (compliance). The application shall describe the
proposed variations and set forth the reasons therefor. Variations shall
not be employed until the application has been approved.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended, 1395, as amended
(26 U.S.C. 5178, 5552))
Sec. 19.74 Disaster exemptions.
The regional director (compliance) may, whenever he finds that it is
necessary or desirable, by reason of disaster, temporarily exempt the
proprietor of any plant from any provisions of the internal revenue laws
and this part relating to spirits, except those requiring the payment of
tax on spirits, to the extent he may deem necessary or desirable.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1397, as amended (26 U.S.C. 5562))
Sec. 19.75 Assignment of officers and supervision of operations.
(a) General. The regional director (compliance) may assign such
number of ATF officers to distilled spirits plants and utilize controls
(including the use of Government locks and seals) as necessary to
maintain supervision of operations conducted at such plants. When
supervision is necessary:
(1) The regional director (compliance) may require a proprietor to
delay any distilled spirits operation so that it may be conducted in the
presence of an ATF officer; and
(2) The regional director (compliance) may require the proprietor to
submit a schedule of operations to an ATF officer.
(b) Hours of operation. When operations at a distilled spirits plant
are to be conducted in the presence of an ATF officer, such operations:
(1) Shall not be conducted on Sunday unless specifically authorized by
the regional director (compliance) in each instance on the showing of an
emergency; and (2) Shall be conducted during an 8-hour period between 7
a.m. and 5 p.m. unless, pursuant to the proprietor's application the
regional director (compliance) authorizes the performance and
supervision of operations during other hours. The regional director
(compliance), in administering this provision, shall not restrict such
operation or function to a greater extent than did the provisions of
internal revenue law and regulations on June 30, 1959.
(c) Notification of supervision. (1) When it is determined that
supervision of plant operations is necessary, the regional director
(compliance) shall notify the proprietor of the extent of ATF
supervision.
(2) If supervision of a distilled spirits plant was not terminated
as of December 31, 1979, notification is not necessary for continued
supervision.
(d) Withdrawal of supervision. The regional director (compliance)
shall notify the proprietor when ATF supervision of plant operations is
to be withdrawn.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5553);
Sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5201, 5202))
Sec. 19.76 Allowance of remission, abatement, credit or
refund of tax.
The regional director (compliance) is authorized to allow claims for
remission, abatement, credit, and refund of tax, filed under the
provisions of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008))
Sec. 19.77 Installation of meters, tanks and other apparatus.
The regional director (compliance) is authorized to require the
proprietor to install meters, tanks, pipes, or any other apparatus which
the regional director (compliance) deems advisable for the purpose of
protecting the revenue. Any proprietor refusing or neglecting to install
such apparatus when so required shall not be permitted to conduct
business.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5552))
[[Page 284]]
Sec. 19.78 Approval of qualifying documents.
The regional director (compliance) is authorized to approve, except
as otherwise provided in this part, all qualifying documents, including
bonds and consents of surety, required by this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1394, as amended
(26 U.S.C. 5172, 5551); Sec. 805, Pub. L. 96-39, 93 Stat. 275, 276 (26
U.S.C. 5171, 5173))
Sec. 19.79 Discontinuance of storage facilities.
When the regional director (compliance) finds that any facilities
for the storage of spirits on bonded premises are unsafe or unfit for
use, or that spirits stored are subject to great loss or wastage, he may
require the discontinuance of the use of such facilities and require the
spirits contained therein to be transferred to such other storage
facilities as he may designate. Such transfer shall be made at such time
and under such supervision as the regional director (compliance) may
require and the expense of the transfer shall be paid by the owner or
the warehouseman of the spirits. Whenever the owner of such spirits or
the warehouseman fails to make such transfer within the time prescribed
or to pay the just and proper expense of such transfer, as ascertained
and determined by the regional director (compliance), such spirits may
be seized and sold in the same manner as goods sold on distraint for
taxes, and the proceeds of such sale shall be applied to the payment of
the taxes due thereon and the cost and expense of such sale and removal,
and the balance shall be paid over to the owner of such spirits.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5236))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]
Authorities of ATF Officers
Sec. 19.81 Right of entry and examination.
Any ATF officer may at all times, as well by night as by day, enter
any distilled spirits plant, or any other premises where distilled
spirits operations are carried on, or structure or place used in
connection therewith for storage or other purposes; to make examination
of the materials, equipment, and facilities thereon; and make such
gauges and inventories as he deems necessary. Whenever any ATF officer,
having demanded admittance, and having declared his name and office, is
not admitted into such premises by the proprietor or other person having
charge thereof, he may at all times, use such force as is necessary for
him to gain entry to such premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1357, as amended (26 U.S.C. 5203))
Sec. 19.82 Detention of containers.
Any ATF officer may detain any container containing, or supposed to
contain, spirits when such officer has reason to believe that the tax
imposed by law on such spirits has not been paid or determined as
required by law or this part, or that such container is being removed in
violation of law or this part. Every such container may be held by the
ATF officer at a safe place until it shall be determined whether the
property so detained is liable by law to be proceeded against for
forfeiture. However, such summary detention shall not continue in any
case longer than 72 hours without process of law or intervention of the
regional director (compliance), unless the person in possession of the
container immediately prior to its detention, in consideration of the
container being kept on his premises during detention, executes a waiver
of the 72-hours limitation on detention of the container.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1375 (26 U.S.C. 5311))
Sec. 19.83 Samples for the United States.
Any ATF officer is authorized to take samples of spirits, denatured
spirits, articles, wines, or any other materials which may be added to
such products for analysis, testing, or other determinations to
ascertain whether there is compliance with the provisions of law and
regulations. When such samples are removed from the bonded premises, the
ATF officer shall give
[[Page 285]]
the proprietor a receipt covering the sample so removed.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1357, as amended,
1362, as amended, 1380, as amended (26 U.S.C. 5201, 5203, 5214, 5362))
Sec. 19.84 Gauging and measuring equipment.
All gauging and measuring equipment and means required by 27 CFR
part 30 and this part to be furnished by the proprietor for the purpose
of ascertaining the quantity, alcoholic content, specific gravity, and
producing capacity of any materials, denaturants, mash, wort, or beer,
or the quantity and alcoholic content of spirits, denatured spirits, or
wines, shall be maintained by the proprietor in accurate and readily
usable condition. Any ATF officer may disapprove the use of any
equipment or means if such officer finds it would be insufficiently
accurate and the proprietor shall promptly provide accurate equipment or
means in lieu of the disapproved equipment or means.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended, 1358, as amended
(26 U.S.C. 5006, 5204))
Entry and Examination of Premises
Sec. 19.86 Furnishing facilities and assistance.
On the demand of any ATF officer or agent, the proprietor shall
furnish the necessary facilities and assistance to enable the officer or
agent to gauge the spirits in any container or to examine any apparatus,
equipment, containers, or materials on the distilled spirits plant
premises. The proprietor shall also, on demand of an ATF officer or
agent, open all doors, and open for examination all containers on the
plant premises. The proprietor shall, on request of an ATF officer,
furnish the exact locations (including the number of containers at each
location) of all packages and similar portable approved containers
within a given lot, and locations (i.e., buildings, rooms or areas)
where spirits in cases are stored.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1357, as amended (26 U.S.C. 5203);
Sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5202))
Gauging of Spirits, Wines or Alcoholic Flavoring Materials
Sec. 19.91 Gauging.
(a) Gauging of spirits and wine. Gauges shall be made by the
proprietor. However, the regional director (compliance) may require that
such gauges be made in the presence of and be verified by an ATF
officer. Gauges of spirits, denatured spirits, or wine shall be made in
accordance with 27 CFR part 30 and as provided in this part. However,
the gauge for wine that is to be transferred to a bonded wine cellar
shall be recorded by kind and percent of alcohol by volume. When bulk
spirits, denatured spirits, or wines are to be volumetrically measured,
the measurement shall be in a tank or bulk conveyance for which a
calibration chart is provided, by a meter approved under Sec. 19.277,
or, when approved by the Director, by other devices or methods.
Calibration charts shall be certified as accurate by persons qualified
to calibrate tanks or bulk conveyances. When spirits in bottles are
gauged, the gauge may be established on the basis of legible case
markings and label information, if (1) the bottles are full, and (2)
there is no evidence that the bottles have been tampered with.
(b) Gauging of alcoholic flavoring materials. Each alcoholic
flavoring material shall be gauged when dumped, except that when
received from a manufacturer in a closed nonporous bottle, can, or
package such material may be gauged by using the proof derived from the
container label or a related statement of the proof from the
manufacturer. When proof is determined from a label or manufacturer's
statement, the proprietor shall periodically test a sufficient number of
samples of the alcoholic flavoring material to verify the accuracy of
the proof so determined and shall record the results of those tests on
the gauge record. The regional director (compliance) may require that
all alcoholic flavoring materials be gauged by the methods provided in
27 CFR part 30.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1396, as amended
(26 U.S.C. 5204, 5559))
[[Page 286]]
Sec. 19.92 When gauges are required.
(a) Initial proof. Except for a gauge required by Sec. 19.383 or
Sec. 19.517 or in any case where the proof changes as a result of a
storage or processing operation, the initial determination of proof for
distilled spirits, wine, or eligible flavors may be used whenever a
subsequent gauge is required by this part to be made at the same plant.
(b) Required gauges. Spirits, wine and alcoholic flavoring materials
shall be gauged whenever required by this part. Such gauges include:
(1) Entered for deposit,
(2) Filled into packages from storage tanks,
(3) Transferred or received in bond,
(4) Transferred between operational accounts,
(5) Mixed in the manufacture of a distilled spirits product,
(6) Reduced in proof prior to commencement of bottling,
(7) Destroyed,
(8) Removed or withdrawn from bond,
(9) Returned to bond, or
(10) As otherwise required by the regional director (compliance).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1396, as amended
(26 U.S.C. 5204, 5559))
[T.D. ATF-199, 50 FR 9160, Mar. 6, 1985, as amended by T.D. ATF-297, 55
FR 18063, Apr. 30, 1990]
Sec. 19.93 Quantity determination of spirits in bond.
Where bulk spirits in bond are gauged for determination of tax, or
are gauged in packages, the quantity shall be determined by weight
pursuant to the provisions of 27 CFR part 30. In all other instances
where spirits are gauged in bond, gauged for denaturation, or are gauged
for transfer in bond or for withdrawal from bond free of tax or without
payment of tax, the quantity may be determined by weight or volume.
Volumetric determinations of quantity may be made by meters approved
under Sec. 19.277.
(Sec, 201, Pub. L. 85-859, 72 Stat. 1396, as amended (26 U.S.C. 5559))
Securing of Conveyances Used for Transporting Spirits
Sec. 19.96 Securing of conveyances.
(a) Construction for securing. If a conveyance is required by this
part to be secured, the conveyance shall be constructed in such manner
that all openings, including valves (if any) on bulk conveyances, may be
closed and secured.
(b) Approval of securing devices. (1) All seals, locks, or other
devices that are required to be used on conveyances in which spirits are
transferred in bond, or withdrawn free of tax or without payment of tax,
shall be approved by the Director prior to use. However, cap seals, at
least \3/4\ of an inch in diameter, and ball-strap-type (railroad) seals
with a strap at least \5/16\ of an inch wide may be used on conveyances
without prior approval of the Director. Such seals shall:
(i) Be made of durable materials,
(ii) Bear the plant registration number or name, or readily
recognizable abbreviation of the name of the proprietor,
(iii) Bear a serial number including letter prefixes or suffixes,
that will not be repeated within a six month period,
(iv) Be durably marked in readily legible form, and
(v) Be made so that their being opened will leave evidence thereof.
(2) Seals, locks or other devices that are used on conveyances to
transport taxpaid spirits, or denatured spirits transferred in bond or
withdrawn free of tax, need not be approved.
(c) Furnishing and affixing securing devices. (1) Seals, locks, or
other devices for use on conveyances shall be furnished and affixed by
the proprietor.
(2) The regional director (compliance) may, if he deems necessary,
require conveyances in which spirits are: (i) transferred in bond, (ii)
withdrawn free of tax, or (iii) withdrawn without payment of tax, to be
secured by seals, locks, or other devices approved and furnished by the
Bureau and affixed by an ATF officer.
(3) Seals, locks, or other devices shall be affixed:
(i) As soon as the conveyance is loaded for shipment, and
[[Page 287]]
(ii) In such a manner that access to the contents of the conveyance
cannot be gained without showing evidence of tampering.
(4) The openings of bulk conveyances may be secured with permanent
seals, locks, or other devices.
(d) Numbers and marks on proprietor's securing devices. Seals,
locks, or other devices that are furnished by the proprietor for use on
conveyances shall be serially numbered. Letter abbreviations of the name
of a proprietor may not be used unless approved by the Director pursuant
to written application.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended 1410, as amended
(26 U.S.C. 5206, 5682))
Conveyance of Spirits or Wines on Plant Premises
Sec. 19.97 Taxpaid spirits or wines on bonded premises.
Spirits or wines on which the tax has been paid or determined may be
conveyed within a plant across bonded premises, but such spirits or
wines shall not be stored or allowed to remain on the bonded premises
and shall be kept separate and apart from spirits or wines on which the
tax has not been paid or determined. However, spirits returned to bonded
premises in accordance with the provisions of 26 U.S.C. 5215 shall be
allowed to remain on the bonded premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1404, as amended,
(26 U.S.C. 5201, 5612))
Sec. 19.98 Conveyance of untaxpaid spirits or wines within
a distilled spirits plant.
Untaxpaid spirits or wines may be conveyed between different
portions of the bonded premises of the same distilled spirits plant,
across any other premises of such plant; or (by uninterrupted
transportation) over any public thoroughfare; or (by uninterrupted
transportation) over a private roadway if the owner, or lessee, of the
roadway agrees, in writing, to allow ATF officers access to the roadway
to perform their necessary duties. The conveyance of spirits or wines as
authorized in this section is subject to the following conditions:
(a) The spirits or wines are not stored or allowed to remain on any
premises of such plant other than bonded premises,
(b) The spirits or wines are kept completely separate and apart from
spirits on which the tax has been paid or determined,
(c) A description of the means and route of the conveyance and of
the portions of the distilled spirits plant between which spirits or
wines will be conveyed, and a copy of any agreement furnished by the
owner, or lessee, of a private roadway have been submitted to and
approved by the regional director (compliance), and
(d) Consent of surety on the operations or unit bond has been
furnished by the proprietor, on Form 1533, extending the terms of the
bond to cover conveyance of the spirits or wines.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1398, as amended
(26 U.S.C. 5201, 5601))
Sec. 19.99 Spirits in customs custody.
Spirits in customs custody may be conveyed, when necessary, across
distilled spirits plant premises if:
(a) The spirits are not stored or allowed to remain on the premises
of the distilled spirits plant,
(b) The spirits are kept separate and apart from other spirits on
the premises and are moved expeditiously,
(c) A description of the means and route of conveyance of the
spirits across the plant premises has been submitted to and approved by
the regional director (compliance), and
(d) Consent of surety on the operations or unit bond has been
furnished by the proprietor, on Form 1533, extending the terms of the
bond to cover the conveyance of the spirits.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Penalties of Perjury
Sec. 19.100 Execution under penalties of perjury.
(a) Declaration. When a return, claim, form, or other document
called for under this part, or in the instructions thereon, is required
to be executed under penalties of perjury, it shall contain the
following declaration:
[[Page 288]]
I declare under the penalties of perjury that this (insert type of
document, such as report, or claim), including supporting documents, has
been examined by me and, to the best of my knowledge and belief, is
true, correct, and complete.
(b) Signing. The declaration shall bear the signature and title of
the proprietor or other duly authorized person.
(Act of August 16, 1954, Pub. L. 591--Chapter 736, 68A Stat. 749 (26
U.S.C. 6065))
Subpart E--[Reserved]
Subpart F--Location and Use
Sec. 19.131 Restrictions as to locations.
Distilled spirits plants shall not be located in any dwelling house,
or in any shed, yard, or enclosure connected with any dwelling house, or
on board any vessel or boat, or on premises where beer or wine is
produced, or liquors of any description are retailed, or (except as
provided in Sec. 19.133) on premises where any other business is
conducted.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))
Sec. 19.132 Continuity of premises.
The continuity of the distilled spirits plant shall be unbroken
except for separations by public waterways, thoroughfares, or carrier
rights-of-way. However, where there are other separations of the plant
premises and all parts of the plant premises are in the same general
location, the Director may approve the registration of the distilled
spirits plant if he finds no jeopardy to the revenue.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))
Sec. 19.133 Use of distilled spirits plant premises.
(a) General. No business or operation shall be conducted on the
premises of a distilled spirits plant other than those authorized in
accordance with subpart D of this part or those authorized to be carried
on or conducted by the notice of registration.
(b) Bonded premises. Bonded premises shall be used exclusively for
distilled spirits operations. Spirits in packages, cases, or other
portable containers on bonded premises shall be stored in a room or
building. However, upon application by the proprietor, the regional
director (compliance) may approve an alternative method of storage of
such spirits if such method is suitable for the protection of the
revenue and the effective administration of this part.
(c) General premises. General premises are any portion of the
distilled spirits plant described in the notice of registration other
than bonded premises. General premises may not be used for any of the
operations required to be conducted on bonded premises. Business offices
and service facilities may be included as a part of general premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))
Sec. 19.134 Bonded warehouses not on premises qualified
for production
of spirits.
(a) Criteria for establishment. (1) A bonded warehouse, other than
one established on the bonded premises of a distilled spirits plant
qualified for production of spirits, or contiguous to a distillery
operated by the warehouseman, may be established if the need therefor is
clearly shown and the prospective needs of the warehouseman will be for
the bonded storage of not less than 250,000 wine gallons of bulk
distilled spirits.
(2) When commercial bonded warehouses are not available in an area
and it is impractical to have a warehouse of 250,000 wine gallon
capacity, the regional director (compliance) may approve the
establishment of a warehouse without regard to the minimum storage
requirements.
(b) Application. (1) The application for registration to establish a
warehouse shall be accompanied by a separate written application setting
forth the necessity for the establishment of the warehouse.
(2) The application shall include:
(i) Approximate quantity of bulk spirits that will be received,
stored, and withdrawn annually;
(ii) Probable number of depositors of spirits;
(iii) Approximate number of persons to be served from the warehouse;
and
[[Page 289]]
(iv) Data or documents indicating the prospective volume of business
or need for establishment.
(c) Approval. (1) The regional director (compliance) may approve the
application for registration if the proposed location of the warehouse
will not be a jeopardy to the revenue and there is satisfactory evidence
of the need for establishing a warehouse.
(2) The regional director (compliance) may also limit the type of
operation to be conducted at a bonded warehouse established with less
than the minimum storage requirements.
(d) Special condition. The proprietor of a warehouse established for
a limited type of operation shall not, in any manner, expand or change
his operation to include any other type of operations until, pursuant to
written application to make such change, he has obtained the approval of
the regional director (compliance).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178);
Sec. 805a, Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))
Subpart G--Qualification of Distilled Spirits Plants
Sec. 19.151 General requirements for registration.
(a) Operations. Except as otherwise provided by law, operations as a
distiller, warehouseman, or processor may be conducted only on the
bonded premises of a distilled spirits plant by a person qualified to
carry out such operations under this subpart.
(b) Establishment. A distilled spirits plant may be established only
by a person who intends to conduct at such plant operations as a
distiller, as a warehouseman, or as both.
(c) Registration. Each person shall, before commencing operations at
a distilled spirits plant, make application for and receive notice of
registration of his plant with respect to such operations as provided in
this part. Application for registration shall be made on Form 5110.41 to
the regional director (compliance). Each application shall be executed
under penalties of perjury, and all written statements, affidavits, and
other documents submitted in support of the application or incorporated
by reference shall be deemed to be a part thereof. The regional director
(compliance) may, in any instance where the outstanding notice of
registration is inadequate or incorrect in any respect, require the
filing of an application on Form 5110.41 to amend the notice of
registration, specifying the respects in which amendment is required.
Within 60 days after the receipt of such notice, the proprietor shall
file such application.
(Sec. 201. Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172);
Sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]
Sec. 19.152 Data for application for registration.
Application on Form 5110.41 shall include the following information:
(a) Serial number and statement of purpose for which filed.
(b) Name and principal business address of the applicant, and the
location of the distilled spirits plant if different from the business
address.
(c) Statement of the type of business organization and of the
persons interested in the business, supported by the items of
information listed in Sec. 19.167.
(d) Statement of the operations to be conducted.
(e) In respect of the plant to which the Form 5110.41 relates, a
list of applicant's operating and basic permits, and of the operations,
withdrawal, or unit bonds (including those filed with the application)
with the name of the surety or sureties for each bond.
(f) List of the offices, the incumbents of which are authorized by
the articles of incorporation or the board of directors to act on behalf
of the proprietor or to sign the proprietor's name.
(g) Description of the plant (see Sec. 19.168).
(h) List of major equipment (see Sec. 19.166).
(i) Statement of maximum proof gallons that will be produced in the
distillery during a period of 15 days, stored on bonded premises, and in
transit to the bonded premises. (Not required if the operations or unit
bond is in the maximum sum.)
(j) With respect to any distilled spirits plant which was not
qualified to operate before June 1, 1985 a certified
[[Page 290]]
statement that relevant and material accounting records (including
regular books of account and such other records and data as may be
necessary to support such records) will be maintained in accordance with
generally accepted accounting principles which enable the proprietor to
file a correct distilled spirits tax return or determine whether he is
liable for distilled spirits taxes.
(k) Statement of physical security measures employed (see
Sec. 19.153).
(l) As applicable, the following:
(1) With respect to the operations of a distiller:
(i) Statement of daily producing capacity in proof gallons.
(ii) Statement of production procedure (see Sec. 19.170).
(iii) Statement whether spirits will be redistilled.
(2) With respect to the operations of a warehouseman:
(i) Description of the system of storage.
(ii) Statement of bulk storage capacity in wine gallons.
(3) With respect to the operations of a processor:
(i) Statement whether bottling operations will be conducted.
(ii) Statement whether denaturing operations will be conducted.
(iii) Statement whether articles will be manufactured.
(iv) Statement whether spirits will be redistilled.
(v) Description of the system of storage of spirits bottled and
cased or otherwise packaged or placed in approved containers for removal
from bonded premises.
(4) If any other business is to be conducted on the distilled
spirits plant premises, as provided by subpart D of this part, a
description of the business, a list of the buildings and/or equipment to
be used, and a statement as to the relationship, if any, of the business
to distilled spirits operations at the plant.
If any of the information required by paragraph (c) of this section is
on file with the regional director (compliance), that information, if
accurate and complete, may by incorporation by reference, be made part
of the application. The applicant shall, when required by the regional
director (compliance), furnish as a part of the application for
registration, additional information as may be necessary to determine
whether the application for registration should be approved.
(68 A Stat. 731, as amended (26 U.S.C. 6001); Sec. 201, Pub. L. 85-859,
72 Stat. 1349, as amended (26 U.S.C. 5172); Sec. 805(a), Pub. L. 96-39,
93 Stat. 275 (26 U.S.C. 5171))
Sec. 19.153 Statement of physical security.
(a) Content. The statement of security shall include:
(1) A general description of the physical security at the distilled
spirits plant, including methods utilized to secure buildings and
outdoor tanks;
(2) A statement whether guard personnel are employed;
(3) A statement whether any electronic or mechanical alarm system is
used;
(4) A statement certifying that locks used meet the specifications
provided in paragraph (e) of Sec. 19.281;
(5) A list of persons by position or title having responsibility for
the custody of and access to keys for approved locks used at the
distilled spirits plant.
(b) Changes. The proprietor shall file an application for amended
registration with the regional director (compliance) for any change in
personnel or procedures contained in the statement of security.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172);
Sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))
Sec. 19.154 Notice of registration.
The application for registration, when approved, shall constitute
the notice of registration of the distilled spirits plant. A distilled
spirits plant shall not be registered or reregistered under this subpart
until the applicant has complied with all requirements of law and
regulations relating to the qualification of the business or operations
in which the applicant intends to engage. A plant shall not be operated
unless the proprietor has a valid notice of registration covering the
businesses and operations to be conducted at such plant. In any instance
where a bond is required to be given or a permit is required to be
obtained with respect to a business or operation before notice of
[[Page 291]]
registration of the plant may be received with respect thereto, the
notice of registration shall not be valid with respect to such business
or operation in the event that such bond or permit is no longer in
effect. An application for reregistration shall be filed and notice of
registration again obtained before engaging in such business or
operation at such plant. Reregistration is not required when a new bond
or a strengthening bond is filed pursuant to Sec. 19.246 or 19.247.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172);
Sec. 805a, Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))
Sec. 19.155 Maintenance of registration file.
The proprietor shall maintain the registration file in looseleaf
form in complete and current condition, readily available at the plant
for inspection by ATF officers.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))
Sec. 19.156 Powers of attorney.
The proprietor shall execute and file with the regional director
(compliance) a Form 1534 (5000.8) for each person authorized to sign or
to act on behalf of the proprietor. (Not required for persons whose
authority is furnished in the application for registration.)
(See 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))
Sec. 19.157 Operating permits.
(a) General. Except as provided in paragraph (b) of this section,
each person required to file an application for registration under
Sec. 19.151 shall make application for and obtain an operating permit
before commencing any of the following operations:
(1) Distilling for industrial use.
(2) Warehousing of spirits for industrial use.
(3) Denaturing spirits.
(4) Warehousing of spirits (without bottling) for nonindustrial use.
(5) Bottling or packaging of spirits for industrial use.
(6) Manufacturing articles.
(7) Any other distilling, warehousing, or processing operation not
required to be covered by a basic permit under the Federal Alcohol
Administration Act (49 Stat. 978, 27 U.S.C. 203, 204). Application for
such operating permit shall be made on Form 5110.25 to the regional
director (compliance).
(b) Exceptions. The provisions of paragraph (a) of this section
shall not apply to any agency of a State or political subdivision
thereof, or to any officer or employee of any such agency acting for the
agency.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271);
Sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))
Sec. 19.158 Data for application for operating permits.
Each application on Form 5110.25 shall be executed under the
penalties of perjury, and all written statements, affidavits, and other
documents submitted in support of the application shall be deemed to be
a part thereof. Applications on Form 5110.25 shall include the following
information:
(a) Name and principal business address of the applicant.
(b) Plant address, if different from the business address.
(c) Description of the operation to be conducted for which an
operating permit must be obtained.
(d) Statement of type of business organization and of the persons
interested in the business, supported by the items of information listed
in Sec. 19.167.
(e) Trade names (see Sec. 19.165).
(f) On specific request of the regional director (compliance),
furnish a statement as to whether the applicant or any of the persons
whose names and addresses are required to be furnished under the
provisions of Sec. 19.167(a)(2) and (c) has ever: (1) Been convicted of
a felony or misdemeanor under Federal or State law; (2) Been arrested or
charged with any violation of State or Federal law (convictions or
arrests or charges for traffic violations need not be reported as to
paragraphs (f)(1) and (f)(2) of this section, if these violations are
not felonies); or (3) Applied for, held, or been connected with a
permit, issued under Federal law to manufacture, distribute, sell or use
spirits or products containing spirits, whether or not for beverage use,
or held any financial interest in any business covered by any
[[Page 292]]
such permit, and, if so, give the number and classification of the
permit, the period of operation, and state in detail whether the permit
was ever suspended, revoked, annulled, or otherwise terminated.
Where any of the information required by paragraph (d) or (f)(3) of this
section is on file with the regional director (compliance), the
applicant may, by incorporation or by reference, state that the
information is made a part of the application for an operating permit.
The applicant shall, when required by the regional director
(compliance), furnish as a part of his application for an operating
permit additional information as may be necessary for the regional
director (compliance) to determine whether the applicant is entitled to
the permit.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271);
Sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))
Sec. 19.159 Issuance of operating permits.
Only one operating permit will be issued for a plant. The operating
permit shall designate the operations permitted. All of the provisions
of this part relating to the performance of the operations covered by
the permit shall be included in the provisions and conditions of the
permit. Operating permits shall be kept posted available for inspection
at the distilled spirits plant.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271);
Sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))
Sec. 19.160 Duration of permits.
Operating permits are continuing, unless automatically terminated by
the terms thereof, suspended or revoked as provided in Sec. 19.163, or
voluntarily surrendered. The provisions of Sec. 19.181 shall be a part
of the terms and conditions of all operating permits issued under this
part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))
Sec. 19.161 Denial of permit.
If, on examination of an application for an operating permit (or on
the basis of inquiry or investigation), the regional director
(compliance) has reason to believe that--
(a) The applicant (including, in the case of a corporation, any
officer, director, or principal stockholder, and, in the case of a
partnership, a partner) is, by reason of his business experience,
financial standing, or trade connections, not likely to maintain
operations in compliance with 26 U.S.C. Chapter 51, or regulations
issued thereunder; or
(b) The applicant has failed to disclose any material information
required, or has made any false statement, as to any material fact, in
connection with the application; or
(c) The premises on which the applicant proposes to conduct the
operations are not adequate to protect the revenue; the regional
director (compliance) may institute proceedings for the denial of the
application in accordance with the procedures set forth in 27 CFR part
200.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))
Sec. 19.162 Correction of permits.
Where an error in an operating permit is discovered, the proprietor
shall, on demand of the regional director (compliance), immediately
return the permit for correction.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))
Sec. 19.163 Suspension or revocation.
Whenever the regional director (compliance) has reason to believe
that any person holding an operating permit--
(a) Has not in good faith complied with the provisions of 26 U.S.C.
Chapter 51, or regulations issued thereunder; or
(b) Has violated conditions of the permit; or
(c) Has made any false statement as to any material fact in the
application therefor; or
(d) Has failed to disclose any material information required to be
furnished; or
(e) Has violated or conspired to violate any law of the United
States relating to intoxicating liquor or has been convicted of any
offense under Title 26, U.S.C. punishable as a felony or of any
conspiracy to commit such offense; or
(f) Has not engaged in any of the operations authorized by the
permit for a
[[Page 293]]
period of more than 2 years; the regional director (compliance) may
institute proceedings for the revocation or suspension of the permit in
accordance with the procedures set forth in 27 CFR part 200.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))
Sec. 19.164 Rules of practice in permit proceedings.
The regulations in 27 CFR part 200 are made applicable to the
procedure and practice in connection with the disapproval of any
application for an operating permit required by this subpart, and in
connection with the suspension and revocation of such permit.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))
Sec. 19.165 Trade names.
(a) Operating permits. Where a trade name is to be used in
connection with the operations of a plant for which an operating permit
is required, the proprietor shall list that trade name on Form 5110.25
(showing the operations in which each trade name will be used) and the
offices where the trade name is registered, supported by copies of any
certificate or other document filed or issued in respect to the trade
name.
(b) Basic permits. Where any distilling, warehousing, or processing
operation is required to be covered by a basic permit under the Federal
Alcohol Administration Act (49 Stat. 978; 27 U.S.C. 203, 204),
regulations issued under such Act govern the approval and use of trade
names for those operations.
(c) Conditions. Operations shall not be conducted under a trade name
until the proprietor is in possession of an operating or basic permit
covering the use of such name.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))
Sec. 19.166 Major equipment.
The following items of major equipment, if on the plant premises,
shall be described in the application for registration:
(a) Tanks (serial number and capacity) used in the production,
storage and processing of distilled spirits, wine, denatured spirits and
articles;
(b) Stills (serial number, kind, capacity and intended use). The
capacity shall be stated as the estimated maximum proof gallons of
spirits capable of being produced every 24 hours, or (for column stills)
may be represented by a statement of the diameter of the base and number
of plates; and
(c) Condensers (serial number).
A statement of certification of accurate calibration shall be included
in the description of tanks that are to be used for gauging distilled
spirits or wine for any purpose.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1352, as amended
(26 U.S.C. 5172, 5179))
Sec. 19.167 Organizational documents.
The supporting information required by paragraph (c) of Sec. 19.152,
and paragraph (d) of Sec. 19.158, includes, as applicable, copies of--
(a) Corporate documents. (1) Corporate charter or a certificate of
corporate existence or incorporation.
(2) List of directors and officers, showing their names and
addresses.
(3) Certified extracts or digests of minutes of meetings of board of
directors, authorizing certain individuals to sign for the corporation.
(4) Statement showing the number of shares of each class of stock or
other evidence of ownership, authorized and outstanding, and the voting
rights of the respective owners or holders.
(b) Articles of partnership. Copy of the articles of partnership or
association, if any, or certificate of partnership or association where
required to be filed by any State, county, or municipality.
(c) Statement of interest. (1) Names and addresses of the 10 persons
having the largest ownership or other interest in each of the classes of
stock in the corporation, or other legal entity, and the nature and
amount of the stockholding or other interest of each, whether the
interest appears in the name of the interested party or in the name of
another for him. If a corporation is wholly owned or controlled by
another corporation, those persons of the parent corporation who meet
the above standards are considered to be the persons
[[Page 294]]
interested in the business of the subsidiary, and the names thereof need
be furnished only upon request of the regional director (compliance).
(2) In the case of an individual owner or partnership, the name and
address of each person interested in the plant, whether the interest
appears in the name of the interested party or in the name of another
for that person.
(d) Availability of additional corporate documents. The originals of
documents required to be submitted under this section and additional
documents which may be required by the regional director (compliance)
such as the articles of incorporation, bylaws, and State certificate
authorizing operations shall be made available to any ATF officer upon
request.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended
(26 U.S.C. 5172, 5271))
Sec. 19.168 Description of plant.
(a) The application for registration shall include a description of
each tract of land comprising the distilled spirits plant.
(b) The description shall:
(1) Clearly indicate the bonded premises and any general premises
included as part of the distilled spirits plant; and
(2) Contain directions and distances in sufficient detail to enable
ATF officers to readily determine the boundaries of the plant.
(c) Each building and outside tank used for the production, storage
and processing of spirits, denatured spirits, articles, or wines shall
be described by location, size, construction, and arrangement with
reference to each by its designated number or letter.
(d) If a plant includes a room or floor in a building, a description
of the building in which the room or floor is situated and its location
shall be given.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))
Sec. 19.169 Registry of stills.
The provisions of subpart C of part 170 of this chapter are
applicable to stills or distilling apparatus located on plant premises
used for distilling. As provided under Sec. 170.55, the listing of a
still in the application for registration, and approval of the
application, constitutes registration of the still.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1355, as amended
(26 U.S.C. 5172, 5179))
[T.D. ATF-207, 50 FR 23681, June 5, 1985]
Sec. 19.170 Statement of production procedure.
The statement of production procedure in the application for
registration shall set forth a step-by-step description of the procedure
employed to produce spirits from an original source, commencing with the
treating, mashing, or fermenting of the raw materials or substances and
continuing through each step of the distilling, purifying and refining
procedure to the production gauge. The kind and approximate quantity of
each material or substance used in producing, purifying, or refining
each type of spirits shall be shown.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))
Changes After Original Qualification
Sec. 19.180 Application for amended registration.
Where there is a change with respect to the information shown in the
notice of registration, the proprietor shall submit, within 30 days of
such change (except as otherwise provided in this subpart), an
application on Form 5110.41 for amended registration. Such application
shall set forth, on sheets appropriately numbered or otherwise
identified, the information necessary to make the notice of registration
accurate and current. Where the change affects only pages or parts of
pages of the notice of registration, such complete pages shall be
submitted as will enable the replacement of the pages affected and
maintenance of the file as provided in Sec. 19.155.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172);
Sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))
Sec. 19.181 Automatic termination of permits.
(a) Permits not transferable. Operating permits issued under this
part shall not be transferred. In the event of the
[[Page 295]]
lease, sale, or other transfer of such a permit, or of the operations
authorized thereby, the permit shall thereupon automatically terminate.
(b) Corporations. In the case of a corporation holding an operating
permit under this part, if actual or legal control of the permittee
corporation changes, directly or indirectly, whether by reason of change
in stock ownership or control (in the permittee corporation or in any
other corporation), by operation of law, or in any other manner, such
permit may remain in effect with respect to the operation covered
thereby until the expiration of 30 days after such change, whereupon
such permit shall automatically terminate. However, if within such 30
day period an application for a new permit covering such operation is
made, then the outstanding operating permit may remain in effect with
respect to the continuation of the operation covered thereby until final
action is taken on such application. When such final action is taken,
such outstanding operting permit shall thereupon automatically
terminate.
(c) Basic permits. The termination of basic permits is governed by
the provisions of 27 CFR part 1.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))
Sec. 19.182 Change in name of proprietor.
Where there is to be a change in the individual, firm, or corporate
name, the proprietor shall file application to amend the registration
and to amend the operating and/or basic permit; a new bond or consent of
surety will not be required. Operations may not be conducted under the
new name prior to approval of the amended registration and issuance of
the amended permit.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended
(26 U.S.C. 5172, 5271))
Sec. 19.183 Change of trade name.
If there is to be a change in, or addition of, a trade name, the
proprietor shall file application to amend the operating and/or basic
permit; a new bond or consent of surety will not be required. Operations
may not be conducted under the new trade name prior to issuance of the
amended permit.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended, (26 U.S.C. 5271))
Sec. 19.184 Changes in stockholders.
Changes in the list of stockholders furnished under the provisions
of Sec. 19.167(c)(1) may, in lieu of submission within 30 days of the
change under the provisions of Sec. 19.180, be submitted annually by the
proprietor on May 1 or other date approved by the regional director
(compliance), except where the sale or transfer of capital stock results
in a change in the control or management of the business.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended
(26 U.S.C. 5172, 5271))
Sec. 19.185 Changes in officers and directors.
Where there is any change in the list of officers and directors
furnished under the provisions of Sec. 19.167(a)(2), the proprietor
shall submit, within 30 days of any such change, an application on Form
5110.41 for amended registration, supported by a new list of officers
and directors and a statement of the changes reflected in such list.
Where the proprietor has shown to the satisfaction of the regional
director (compliance) that certain corporate officers listed on the
original appplication have no responsibilities in connection with the
operations covered by the registration, the regional director
(compliance) may waive the requirements for submitting applications for
amended registration to cover changes of such corporate officers.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, (26 U.S.C. 5172);
Sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]
Sec. 19.186 Change in proprietorship.
(a) General. If there is a change in the proprietorship of a plant
qualified under this part, the outgoing proprietor shall comply with the
requirements of Sec. 19.211, and the successor shall, before commencing
operations, apply for and obtain the required permits, file the required
bonds, and file
[[Page 296]]
application for and receive notice of registration of the plant in the
same manner as a person qualifying as the proprietor of a new plant,
except that the successor may, in the manner provided in Sec. 19.187,
adopt the approved formulas (5150.9) of the predecessor. Spirits may be
transferred from an outgoing proprietor of a plant to a successor in the
manner provided in Sec. 19.201.
(b) Fiduciary. If the successor to the proprietorship of a plant is
an administrator, executor, receiver, trustee, assignee or other
fiduciary, he shall comply with the provisions of paragraph (a) of this
section except that he may, in lieu of filing a new bond, furnish
consent of surety extending the terms of the predecessor's bond, and he
may also incorporate by reference in the application for registration on
Form 5110.41 any pertinent information contained in the predecessor's
notice of registration. The fiduciary shall furnish a certified copy of
the order of the court or other pertinent document showing qualification
as such fiduciary. The effective dates of the qualifying documents filed
by the fiduciary shall be the effective date of the court order, or the
date specified therein for him to assume control. If the fiduciary was
not appointed by a court, the date of assuming control shall coincide
with the effective date of the qualifying documents filed by the
fiduciary.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50
FR 9160, Mar. 6, 1985; 50 FR 20099, May 14, 1985]
Sec. 19.187 Adoption of formulas.
(a) Forms 5110.38. The adoption by a successor of approved Forms
5110.38 (27-B Supplemental) shall be in the form of an application,
filed with the Director. The application shall list the formulas for
adoption by (1) formula number, (2) name of product, and (3) date of
approval. The application shall clearly show that the predecessor has
authorized the use of its previously approved formulas by the successor.
(b) Form 5150.19. The adoption by a successor of approved Form
5150.19 (or previously approved Form 1479-A) shall be in accordance with
Sec. 20.63 of this chapter.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50
FR 9160, Mar. 6, 1985]
Sec. 19.188 Partnerships.
If under the laws of the particular State, the partnership is not
terminated on death or insolvency of a partner, but continues until the
winding up of the partnership affairs is completed, and the surviving
partner has the exclusive right to the control and possession of the
partnership assets for the purpose of liquidation and settlement, such
surviving partner may continue to operate the plant under the prior
qualification of the partnership, provided a consent of surety is filed,
wherein the surety and the surviving partner agree to remain liable on
the operations or unit bond. If such surviving partner acquires the
business on completion of the settlement of the partnership, he shall
qualify in his own name from the date of acquisition, as provided in
Sec. 19.186(a). The rule set forth in this section shall also apply
where there is more than one surviving partner.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))
Sec. 19.189 Change in location.
Where there is a change in the location of the plant, the proprietor
shall file applications to amend the registration of the plant and the
operating and/or basic permit, and either a new bond or a consent of
surety on Form 1533. Operation of the plant may not be commenced at the
new location prior to approval of the amended registration and issuance
of the amended permit.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349 as amended, 1370, as amended
(26 U.S.C. 5172, 5271); Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26
U.S.C. 5173))
Sec. 19.190 Changes in premises.
Except as provided in Secs. 19.202, 19.203, 19.204, and 19.205,
where bonded premises, or any other premises included as a part of the
plant are to be extended or curtailed, the proprietor shall file an
[[Page 297]]
application for registration, Form 5110.41, to cover such extension or
curtailment. Premises and equipment to be included by extension or to be
excluded by curtailment shall not, prior to approval by the regional
director (compliance) of the requried documents, be used for other than
previously approved purposes.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))
Sec. 19.191 Change in operations.
If the proprietor proposes to conduct a new business or operation
involving spirits, he shall file applications to amend the registration
of the plant and the operating and/or basic permit. If the proprietor
desires to engage, on the plant premises, in other businesses, as
provided in subpart D, he shall submit an application to amend the
registration of the plant to include the information required under
Sec. 19.152(l)(4). The additional operation or business may not be
carried on prior to approval of the amended registration and (if
required) issuance of the amended permit.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended
(26 U.S.C. 5172, 5271); Sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26
U.S.C. 5171))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]
Sec. 19.192 Change in production procedure.
If the proprietor desires to produce a new product or make a change
in a production procedure which would affect the designation, or
substantially affect the character of his product, the proprietor shall
file an application to amend the registration of the plant to include
the amended or new statement of production procedure. The new or changed
procedure may not be used prior to approval of the amended registration.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, (26 U.S.C. 5172))
Sec. 19.193 Changes in construction or use of buildings and equipment.
(a) Changes. When a material change, affecting the accuracy of the
notice of registration, is to be made in the construction or use of
buildings or equipment of a plant, other than a change covered by
Secs. 19.190, 19.202, 19.203, 19.204, or 19.205, the proprietor shall,
before making such change, submit a letterhead notice to the regional
director (compliance) through the area supervisor.
(b) Letterhead notice. The letterhead notice shall:
(1) Describe the proposed change in detail;
(2) Be kept on file with the proprietor's current notice of
registration; and
(3) After completion of the change, be incorporated in the next
amendment of the notice of registration on Form 5110.41, unless the
regional director (compliance) requires immediate amendment.
(c) Emergency changes. The proprietor may make emergency material
changes without prior notification, but when such emergency changes are
made, the proprietor shall promptly report such changes to the area
supervisor.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, (26 U.S.C. 5172))
Operations by Alternating Proprietors
Sec. 19.201 Procedure for alternating proprietors.
(a) General. A plant, or any part thereof which is suitable for
qualification as a separate plant, may be operated alternately by
proprietors who have filed and received approval of the necessary bonds
and applications for registration, and have otherwise qualified under
the provisions of this subpart. Where operations by alternating
proprietors are limited to parts of the plant, the notice of
registration shall describe the areas, rooms or buildings or combination
thereof, which will be alternated, and shall be accompanied by special
diagrams designating the parts of the plant which are to be alternated.
A special diagram shall be submitted for each arrangement under which
the premises will be operated. Once such qualifying documents have been
approved, and initial operations have been conducted thereunder, the
[[Page 298]]
plant, or parts thereof, may be alternated by the proprietor filing
notices on Form 5110.34 with the regional director (compliance). Any
transfer of spirits, idenatured spirits, and wines shall be indicated on
Form 5110.34 filed by each proprietor.
(b) Production. Distilling materials and unfinished spirits in any
bonded areas, rooms or buildings to be alternated shall be processed to
completion by the outgoing proprietor unless transferred to the incoming
proprietor. All finished spirits shall be marked and removed by the
outgoing proprietor in the name in which produced, before production
gauge is made of any spirits by the incoming proprietor.
(c) Storage. Spirits and wines in any bonded areas, rooms, or
buildings to be alternated shall be transferred in bond to the incoming
proprietor. The outgoing proprietor shall execute a consent of surety on
Form 1533 (5000.18) to continue in effect the operations or unit bond
whenever operation of the areas, rooms, or buildings is to be resumed by
him following suspension of operations by an alternate proprietor.
(d) Processing. Spirits, denatured spirits, wines and articles in
any rooms, areas, or buildings to be alternated shall be processed to
completion and removed from the affected areas, rooms, or buildings by
the outgoing proprietor prior to the effective date and hours given in
the notice unless transferred or retained in locked tanks as provided in
this paragraph. Spirits, denatured spirits, and wines may be transferred
to the incoming proprietor. Further, the outgoing proprietor shall
execute a consent of surety on Form 1533 (5000.18) to continue in effect
the operations or unit bond whenever operation of the affected areas,
rooms, or buildings is to be resumed by him following suspension of
operations by the alternate proprietor. Denatured spirits and articles
may be retained in tanks locked by approved locks, the keys to which are
in the custody of the outgoing proprietor. In this case, the outgoing
proprietor shall execute a consent of surety on Form 1533 (5000.18) to
continue liability on the operations or unit bond for the tax on such
denatured spirits or articles retained in such tanks, notwithstanding
the change in proprietorship.
(e) Records. Each proprietor shall maintain separate records and
submit separate reports. Records kept by the outgoing proprietor for
spirits, wines, and alcoholic flavoring materials may be used by the
incoming proprietor. All transfers of distilling materials, unfinished
spirits, spirits, denatured spirits, and wines shall be reflected in the
records of each proprietor.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended
(26 U.S.C. 5172, 5271))
Alternate Operations
Sec. 19.202 Alternate use of premises and equipment for
customs
purposes.
(a) General. The premises of a distilled spirits plant may, as
provided in this section, be alternately curtailed and extended to
permit the facilities of the distilled spirits plant to be used
temporarily by customs officers, under applicable customs law and
regulations, for the purpose of gauging or processing distilled spirits.
The use of the excluded portion of the premises for customs purposes is
subject to the approval of the district director of customs. When it is
necessary to convey spirits in customs custody across the premises of a
distilled spirits plant, the proprietor shall comply with the provisions
of Sec. 19.99. When a portion of the distilled spirits plant premises is
first to be excluded as provided in this section, the proprietor shall
file with the regional director (compliance) (1) an application for
registration, Form 5110.41, to cover alternate curtailment and extension
of premises, and (2) a special diagram, in duplicate, delineating the
premises as they will exist, both during extension and curtailment, and
clearly depicting all buildings, floors, rooms, areas, equipment and
spirits lines (identified individually by letter or number) which are to
be subject to alternation, in their relative operating sequence. Once
such qualifying documents have been approved by the regional director
(compliance), the designated premises and equipment may be alternately
curtailed or extended pursuant to notice on Form 5110.34. Portions of
the premises to be excluded
[[Page 299]]
by curtailment or included by extension shall not be used for purposes
other than as set forth in the current notice. The proprietor shall
remove all spirits from the premises or equipment affected by the notice
prior to the effective date and hours of the notice. However, on release
by customs, spirits being transferred to bonded premises under 26 U.S.C.
5232, may remain on the premises to be reincluded in bonded premises.
(b) Separation of premises. The portion of the premises which is to
be excluded from the distilled spirits plant premises as provided in
this section shall be separated from the remaining portion of the
distilled spirits plant premises in a manner which satisfies the
regional director (compliance) that the revenue will not be jeopardized.
(c) Exception. Notwithstanding the provisions of paragraphs (a) and
(b) of this section, the bonded premises may be used temporarily without
filing Form 5110.41 or Form 5110.34, for the sole purpose of gauging
bulk distilled spirits to effect their transfer from customs custody to
ATF bond.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1358, as amended
(26 U.S.C. 5172, 5178))
Sec. 19.203 Alternation of distilled spirits plant and
bonded wine cellar premises.
(a) General. A proprietor of a distilled spirits plant operating a
contiguous bonded wine cellar desiring to alternate the use of each
premises by extension and curtailment shall file necessary qualifying
documents with the regional director (compliance).
(b) Qualifying documents. The proprietor shall file with the
regional director (compliance):
(1) Form 5110.41 and Form 5120.25 to cover the proposed alternation
of premises;
(2) A special diagram, in duplicate, delineating the premises as
they will exist, both during extension and curtailment and clearly
depicting all buildings, floors, rooms, areas, equipment and spirits
lines (identified individually by letter or number) which are to be
subject to alternation, in their relative operating sequence; and
(3) Evidence of existing bond, consent of surety, or a new bond to
cover the proposed alternation of premises.
(c) Proprietor's responsibility. After approval of qualifying
documents for the alternation of premises, and after initial operations
have been conducted thereunder, the proprietor shall execute Form
5110.34 each time the premises are alternated. Prior to the effective
hour of the date shown on the Form 5110.34, the proprietor shall remove
all spirits, denatured spirits, articles, and wines from the distilled
spirits plant premises alternated to bonded wine cellar premises. Any
wine on bonded wine cellar premises shall be removed prior to
alternation to distilled spirits plant premises unless wine is being
simultaneously transferred in bond to the distilled spirits plant.
(d) Separation of premises. Separation of distilled spirits plant
premises from bonded wine cellar premises after alternation shall be in
a manner which satisfies the regional director (compliance) that the
revenue will not be jeopardized.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended
(26 U.S.C. 5172, 5178))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-344, 58
FR 40354, July 28, 1993]
Sec. 19.204 Alternation of distilled spirits plant and
taxpaid wine
bottling house premises.
(a) General. A proprietor of a distilled spirits plant operating a
contiguous taxpaid wine bottling house desiring to alternate the use of
each premises by extension and curtailment shall file necessary
qualifying documents with the regional director (compliance).
(b) Qualifying documents. The proprietor shall file with the
regional director (compliance):
(1) Form 5110.41 and Form 5120.25 to cover the proposed alternation
of premises;
(2) A special diagram, in duplicate, delineating the premises as
they will exist, both during extension and curtailment and clearly
depicting all buildings, floors, rooms, areas, equipment and spirits
lines (identified individually by letter or number) which are
[[Page 300]]
to be subject to alternation, in their relative operating sequence; and
(3) Evidence of existing bond, consent of surety, or a new bond to
cover the proposed alternation of premises.
(c) Proprietor's responsibility. After approval of qualifying
documents for the alternation of premises, and after initial operations
have been conducted thereunder, the proprietor shall execute Form
5110.34 each time the premises are alternated. Prior to the effective
hour of the date shown on the Form 5110.34, the proprietor shall remove
all spirits, denatured spirits, articles, and wines from the distilled
spirits plant premises alternated to taxpaid wine bottling house
premises. Any wine on taxpaid wine bottling house premises shall be
removed prior to alternation to distilled spirits plant premises.
(d) Separation of premises. Separation of distilled spirits plant
premises from taxpaid wine bottling house premises after alternation
shall be in a manner which satisfies the regional director (compliance)
that the revenue will not be jeopardized.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended
(26 U.S.C. 5172, 5178))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-344, 58
FR 40354, July 28, 1993]
Sec. 19.205 Alternate curtailment and extension of bonded
premises for use as general premises.
(a) General. The premises of a distilled spirits plant may, as
provided in this section, be alternately curtailed and extended to
permit the bonded premises of the distilled spirits plant to be used
temporarily as general premises, or to permit the general premises of a
distilled spirits plant to be used temporarily as bonded premises.
(b) Qualifying documents. When a portion of the distilled spirits
plant premises is first to be curtailed or extended as provided in this
section, the proprietor shall file with the regional director
(compliance)--
(1) An application for registration, Form 5110.41, to cover
alternate extension and curtailment of the premises, and
(2) A special diagram, in duplicate, delineating the premises as
they will exist, both during extension and curtailment, and clearly
depicting all buildings, floors, rooms, areas, equipment and spirits
lines (identified individually by letter or number) which are to be
subject to alternation, in their relative operating sequence.
(c) Proprietor's responsibility. Once such qualifying documents have
been approved by the regional director (compliance), the designated
premises and equipment may be alternately curtailed or extended pursuant
to notice on Form 5110.34. Portions of the premises to be excluded by
curtailment or included by extension shall not be used for purposes
other than as set forth in the current notice. The proprietor shall
remove all spirits, denatured spirits, articles, and wines from the
premises or equipment affected by the notice prior to the effective date
and hour of the notice, except that--
(1) Bonded spirits on portions of bonded premises that are to be
curtailed to general premises need not be removed if the spirits are
taxpaid concurrent with the filing of Form 5110.34 to effect
curtailment; and
(2) Taxpaid spirits on portions of general premises to be curtailed
to bonded premises need not be removed if the spirits are to be
immediately dumped and returned to bond under the provisions of subpart
U of this part.
(d) Separation of premises. The portion of the premises which is to
be curtailed or extended as provided in this section shall be separated
from the remaining portion of the distilled spirits plant in a manner
which satisfies the regional director (compliance) that the revenue will
not be jeopardized.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended
(26 U.S.C. 5172, 5178))
Sec. 19.206 Curtailment and extension of plant premises
for the
manufacture of eligible flavors.
(a) General. The premises of a distilled spirits plant may be
alternately curtailed and extended, as provided in this section, to
permit the use of the facilities for the manufacture of eligible
flavors.
[[Page 301]]
(b) Qualifying documents. When a portion of the distilled spirits
plant premises is first to be curtailed or extended as provided in this
section, the proprietor shall file with the regional director
(compliance)--
(1) An application for registration, Form 5110.41, to cover
alternate extension and curtailment of the premises, and
(2) A special diagram, in duplicate, delineating the premises as
they will exist, both during extension and curtailment, and clearly
depicting all buildings, floors, rooms, areas, equipment and spirits
lines (identified individually by letter or number) which are to be
subject to alternation, in their relative operating sequence.
(c) Proprietor's responsibility. Once such qualifying documents have
been approved by the regional director (compliance), the designated
premises and equipment may be alternately curtailed or extended pursuant
to notice on Form 5110.34. Portions of the premises to be excluded by
curtailment or included by extension shall not be used for purposes
other than as set forth in the current notice. The proprietor shall
remove all spirits, denatured spirits, articles, and wines from the
premises or equipment which are to be curtailed from bonded premises or
are to be included by extension of bonded premises prior to the
effective date and hour of the notice, except that--
(1) Bonded spirits on portions of bonded premises that are to be
curtailed need not be removed if the spirits are taxpaid concurrent with
the filing of Form 5110.34 to effect curtailment; and
(2) Taxpaid spirits which are on portions of premises to be included
by extension of bonded premises and which have not been used in the
manufacture of a nonbeverage product need not be removed if the spirits
are to be dumped immediately and returned to bond under the provisions
of subpart U of this part.
(d) Separation of premises. The portion of the premises which is to
be curtailed or extended as provided in this section shall be separated
from the remaining portion of the distilled spirits plant in a manner
which satisfies the regional director (compliance) that the revenue will
not be jeopardized.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended
(26 U.S.C. 5172, 5178))
[T.D. ATF-297, 55 FR 18063, Apr. 30, 1990]
Permanent Discontinuance of Business
Sec. 19.211 Notice of permanent discontinuance.
When the proprietor permanently discontinues any or all of the
operations listed in the notice of registration, he shall file a Form
5110.41 to show the discontinuance. Form 5110.41 shall be accompanied
(a) by all permits issued to the proprietor under this subpart covering
the discontinued operations, and by the proprietor's request that such
permits be canceled; (b) by the proprietor's written statement
disclosing, as applicable, whether (1) all spirits, denatured spirits,
articles, wines, liquor bottles, and other pertinent items have been
lawfully disposed of, (2) any spirits, denatured spirits, wines, or
liquor bottles are in transit to the premises, (3) all approved
applications for transfer of spirits and denatured spirits to the
premises have been secured and returned to the regional director
(compliance) for cancellation; and (c) by pertinent reports coverning
the discontinued operations (each report shall be marked ``Final
Report'').
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended
(26 U.S.C. 5172, 5271))
[T.D. ATF-206, 50 FR 23951, June 7, 1985]
Subpart H--Bonds and Consents of Surety
Sec. 19.231 Filing of operations or unit bonds.
Every person intending to establish a distilled spirits plant shall
file an operations or unit bond as prescribed in this subpart, covering
distilled spirits operations at such plant, with the regional director
(compliance), at the time of filing the original application for
registration of the plant, and at such other times as are required by
this part. Such bond shall be conditioned that he shall faithfully
comply
[[Page 302]]
with all provisions of law and regulations relating to activities
covered by such bond, will pay all taxes imposed by 26 U.S.C. Chapter
51, and shall pay all penalties incurred or fines imposed for violation
of any such provisions. The regional director (compliance) may require,
in connection with any operations or unit bond, a statement, executed
under the penalties of perjury, as to whether the principal or any
person owning, controlling, or actively participating in the management
of the business of the principal has been convicted of or has
compromised any offense set forth in Sec. 19.237(a)(1) or has been
convicted of any offense set forth in Sec. 19.237(a)(2). In the event
the above statement contains an affirmative answer, the applcant shall
submit a statement describing in detail the circumstances surrounding
such conviction or compromise. No person shall comence or continue
distilled spirits operations at such plant unless he has a valid
operations or unit bond (and consent of surety, if necessary), as
required in respect of such operations by this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended (26 U.S.C. 5551);
Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]
Sec. 19.232 Additional condition of operations bond.
In addition to the requirements of Sec. 19.231, the operations bond
shall be conditioned on payment of the tax now or hereafter in force,
except as provided by law, including taxes on all unexplained shortages
of bottled distilled spirits.
(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))
Sec. 19.233 Corporate surety.
(a) Surety bonds required by this part may be given only with
corporate sureties holding certificates of authority from, and subject
to the limitations prescribed by, the Secretary as set forth in the
current revision of Treasury Department Circular 570 (Companies Holding
Certificates of Authority as Acceptable Sureties on Federal Bonds and as
Acceptable Reinsuring Companies).
(b) Treasury Department Circular No. 570 is published in the Federal
Register yearly as of the first workday of July. As they occur, interim
revisions of the circular are published in the Federal Register. Copies
may be obtained from the Audit Staff, Bureau of Government Financial
Operations, Department of the Treasury, Washington, DC 20226.
(Ch. 390, Pub. L. 80-280, 61 Stat. 648 as amended (31 U.S.C. 9304,
9306))
Sec. 19.234 Deposit of securities in lieu of corporate
surety.
In lieu of corporate surety, the principal may pledge and deposit,
as surety for his bond, securities which are transferable and are
guaranteed as to both interest and principal by the United States, in
accordance with the provisions of 31 CFR part 225.
(Ch. 390, Pub. L. 80-280, 61 Stat. 650 (31 U.S.C. 9301, 9303))
Sec. 19.235 Consents of surety.
Consents of surety to changes in the terms of bonds shall be
executed on Form 1533 by the principal and by the surety with the same
formality and proof of authority as is required for the execution of
bonds.
(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))
Sec. 19.236 Filing and execution of powers of attorney.
(a) Filing. Each bond, and each consent to changes in the terms of a
bond, shall be accompanied by a power of attorney authorizing the agent
or officer who executed the bond or consent to so act on behalf of the
surety. The regional director (compliance) who is authorized to approve
the bond may require additional evidence of the authority of the agent
or officer to execute the bond or consent.
(b) Execution. The power of attorney shall be prepared on a form
provided by the surety company and executed under the corporate seal of
the company. If the power of attorney submitted is other than a manually
signed original, it shall be accompanied by certification of its
validity.
(Ch. 390, Pub. L. 80-280, 61 Stat. 648 (31 U.S.C. 9304, 9306))
[[Page 303]]
Sec. 19.237 Disapproval of bonds or consents of surety.
(a) Disapproval. The regional director (compliance) may disapprove
any bond or consent of surety submitted in respect to the operations of
a distiller, warehouseman, or processor, if the principal or any person
owning, controlling, or actively participating in the management of the
business of the principal shall have been previously convicted, in a
court of competent jurisdiction of--
(1) Any fraudulent noncompliance with any provision of any law of
the United States, if such provision related to internal revenue or
customs taxation of spirits, wines, or beer, or if such an offense shall
have been compromised with the person on payment of penalties or
otherwise, or
(2) Any felony under a law of any State or the District of Columbia,
or the United States, prohibiting the manufacture, sale, importation, or
transportation of spirits, wine, beer, or other intoxicating liquor.
(b) Appeal. Where a bond or consent of surety is disapproved by the
regional director (compliance), the person giving the bond may appeal to
the Director, who will hear such appeal. The decision of the Director
shall be final.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended (26 U.S.C. 5551))
Secs. 19.238--19.240 [Reserved]
Sec. 19.241 Operations bond--distilled spirits plant and
adjacent bonded wine cellar.
(a) General. A wine cellar under the provisions of 27 CFR part 24
shall be treated as being adjacent to a distilled spirits plant if--
(1) Such distilled spirits plant is qualified under subpart G for
the production of distilled spirits; and
(2) Such wine cellar and distilled spirits plant are operated by the
same person (or in the case of a corporation, by such corporation and
its controlled subsidiaries). For the purpose of this section a
controlled subsidiary is a corporation where more than 50 percent of the
voting power is controlled by the parent corporation.
(b) Bond in lieu of wine cellar bond. In the case of an adjacent
bonded wine cellar, a bond furnished under this subpart which covers
operations at such bonded wine cellar shall be in lieu of any bond which
would otherwise be required under 26 U.S.C. 5354 with respect to such
wine cellar (other than supplemental bonds required under the second
sentence of 26 U.S.C. 5354) and the operations bond listed in
Sec. 19.245(a)(1).
(c) Liability. Bonds given under this section shall contain the
terms and conditions of the bonds in lieu of which they are given. The
total amount of such operations bond shall be available for the
satisfaction of any liability incurred under the terms or conditions of
such bond.
(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-299, 55
FR 24989, June 19, 1990]
Sec. 19.242 Area operations bond.
Any person (or, in the case of a corporation, a corporation and its
controlled subsidiaries) operating more than one plant in a region may
give an area operations bond covering the operation of any two or more
of such plants, and any bonded wine cellars which are adjacent to such
plants and which otherwise could be covered by an operations bond. For
the purpose of this section, a controlled subsidiary is a corporation
where more than 50 percent of the voting power is controlled by the
parent corporation. Bonds given under this section shall be in lieu of
the bonds which would be required under Sec. 19.245(a) and shall contain
the terms and conditions of such bonds. If the area operations bond
covers the operations of more than one corporation, each corporation
shall be shown as principal, and the bond shall be signed for each
corporation. The total amount of the area operations bond shall be
available for the satisfaction of any liability incurred under the terms
or conditions of such bond.
(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))
Sec. 19.243 Withdrawal bond.
Any person (or, in the case of a corporation, a corporation and its
controlled subsidiaries) operating one or
[[Page 304]]
more distilled spirits plants within a region and who intends to
withdraw spirits from bond on determination, but before payment, of the
tax shall, before making any such withdrawal, furnish a withdrawal bond
to secure payment of the tax on all spirits so withdrawn. Such bond
shall be in addition to the operations bond, and if the distilled
spirits are withdrawn under the withdrawal bond, the operations bond
shall no longer cover liability for payment of the tax on the spirits
withdrawn. For the purpose of this section, a controlled subsidiary is a
corporation where more than 50 percent of the voting power is controlled
by the parent corporation. The bond, if it covers more than one plant,
shall show as to each plant covered by the bond the part of the total
sum which represents the penal sum (computed in accordance with
Sec. 19.245) for each such plant. If the penal sum of the bond covering
a plant, or the penal sum allocated to any plant (where the bond covers
more than one plant), is in an amount less than the maximum prescribed
in Sec. 19.245, withdrawals from such plant shall not exceed the
quantity permissible, as reflected by the penal sum in the bond for such
plant. Such withdrawal bond shall be conditioned that the total amount
of the bond shall be available for satisfaction of any liability
incurred under the terms and conditions of such bond.
(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))
Sec. 19.244 Unit bond.
Any person (or, in the case of a corporation, a corporation and its
controlled subsidiaries) who would otherwise be required to give bonds
for both operations at one or more distilled spirits plants (and any
adjacent bonded wine cellars) and withdrawals from one or more distilled
spirits plants within a reigon may, in lieu of furnishing separate bonds
for operations and withdrawals, furnish a unit bond containing the terms
and conditions of the bonds in lieu of which it is given. For the
purpose of this section, a controlled subsidiary is a corporation where
more than 50 percent of the voting power is controlled by the parent
corporation. The unit bond shall show as to each plant covered by the
bond the part of the total sum which represents the penal sum (computed
in accordance with Sec. 19.245) for operations at and withdrawals from
each plant. If the penal sum of the bond covering a plant, or the penal
sum allocated to any plant (if the bond covers more than one plant), is
in an amount less than the maximum prescribed in Sec. 19.245, operations
at and/or withdrawals from such plant shall not exceed the quantity
permissible as reflected by the penal sum in the bond for such plant.
The unit bond shall be conditioned that the total amount of the bond
shall be available for satisfaction of any liability incurred under the
terms and conditions of such bond.
(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))
Sec. 19.245 Bonds and penal sums of bonds.
The bonds, and the penal sums thereof, required by this subpart, are
as follows:
Penal Sum
----------------------------------------------------------------------------------------------------------------
Type of bond Basis Minimum Maximum
----------------------------------------------------------------------------------------------------------------
(a) Operations bond:
(1) One plant bond--
(i) Distiller............................. The amount of tax on spirits produced
$5,000 $100,000
during a period of 15 days.
(ii) Warehouseman:
(A) General............................. The amount of tax on spirits and wines
5,000 200,000
deposited in, stored on, and in
transit to bonded premises.
(B) Limited to storage of spirits in ......do..............................
5,000 50,000
packages to a total of not over 50,000
proof gallons.
[[Page 305]]
(iii) Distiller and warehouseman.......... The amount of tax on spirits produced
10,000 200,000
during a period of 15 days, and the
amount of tax on spirits and wines
deposited, in stored on, and in
transit to bonded premises.
(iv) Distiller and processor.............. The amount of tax on spirits produced
10,000 200,000
during a period of 15 days, and the
amount of tax on spirits, denatured
spirits, articles, and wines
deposited in, stored on, and in
transit to bonded premises.
(v) Warehouseman and processor:
(A) General............................. The amount of tax on spirits, 10,000
250,000
denatured spirits, articles, and
wines deposited in, stored on, and in
transit to bonded premises.
(B) Limited to storage of spirits or ......do..............................
10,000 50,000
denatured spirits in packages to a
total of not over 50,000 proof gallons,
and processing of spirits or denatured
spirits so stored.
(vi) Distiller, warehouseman, and The amount of tax on spirits produced 15,000
250,000
processor. during a period of 15 days, and the
amount of tax on spirits, denatured
spirits, articles, and wines
deposited in, stored on, and in
transit to bonded premises.
(2) Adjacent bonded wine cellars--
(i) Distiller and bonded wine cellar...... The sum of the amount of tax 6,000
150,000
calculated in (a)(1)(i) and with
respect to bonded wine cellar
operations, the amount of tax on
wines and wine spirits possessed and
in transit.
(ii) Distiller, warehouseman and bonded The sum of the amount of tax 11,000
250,000
wine cellar. calculated in (a)(1)(iii) and with
respect to bonded wine cellar
operations, the amount of tax on
wines and wine spirits possessed and
in transit.
(iii) Distiller, processor and bonded wine The sum of the amount of tax 11,000
250,000
cellar. calculated in (a)(1)(iv) and with
respect to bonded wine cellar
operations, the amount of tax on
wines and wine spirits possessed and
in transit.
(iv) Distiller, warehouseman, processor The sum of the amount of tax 16,000
300,000
and bonded wine cellar. calculated in (a)(1)(vi) and with
respect to bonded wine cellar
operations, the amount of tax on
wines and wine spirits possessed and
in transit.
(b) Area operations bond: The penal sum shall be calculated in
accordance with the following table:
---------------------------------------------------------------------------------------
Total penal sums as determined under (a) Requirements for penal sum of area
operations bond
---------------------------------------------------------------------------------------
Not over $300,000............................. 100 percent.
Over $300,000 but not over $600,000........... $300,000 plus 70 percent of excess
over $300,000.
Over $600,000 but not over $1,000,000......... $510,000 plus 50 percent of excess
over $600,000.
Over $1,000,000 but not over $2,000,000....... $710,000 plus 35 percent of excess
over $1,000,000.
Over $2,000,000............................... $1,060,000 plus 25 percent of
excess
over $2,000,000.
---------------------------------------------------------------------------------------
(c) Withdrawal bond:
(1) One plant qualified for distilled The amount of tax which, at any one 1,000
1,000,000
spirits operations. time, is chargeable against such bond
but has not been paid.
(2) Two or more plants in a region qualified Sum of the penal sums for each
plant (\1\) (\2\)
for distilled spirits operations. calculated in (c)(1) of this section.
(d) Unit bond:
(1) Both operations at a distilled spirits Total penal sums of (a) and (c)(1)
of 6,000 1,300,000
plant (and any adjacent bonded wine cellar) this section.
and withdrawals from the bonded premises of
the same distilled spirits plant.
[[Page 306]]
(2) Both operations at two or more distilled Total penal sums of (b) and (c)(2)
of (\3\) (\4\)
spirits plants (and any adjacent bonded this section in lieu of which given.
wine cellar) within the same region and
withdrawals from the bonded premises of the
same distilled spirits plants.
----------------------------------------------------------------------------------------------------------------
\1\ Sum of the minimum penal sums required for each plant covered by the bond.
\2\ Sum of the maximum penal sums required for each plant covered by the bond.
(The maximum penal sum for one
plant is $1,000,000.)
\3\ Sum of the minimum penal sums for operations and withdrawal bonds required
for each plant covered by the
bond.
\4\ Sum of the maximum penal sums for area operations bonds and withdrawal bonds
required for the plants covered
by the unit bond.
(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]
Sec. 19.246 Strengthening bonds.
In all cases when the penal sum of any bond becomes insufficient,
the principal shall either give a strengthening bond with the same
surety to attain a sufficient penal sum, or give a new bond to cover the
entire liability. Strengthening bonds will not be approved where any
notation is made thereon which is intended, or which may be construed,
as a release of any former bond, or as limiting the amount of any bond
to less than its full penal sum. Strengthening bonds shall show the
current date of execution and the effective date.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended (26 U.S.C. 5551);
Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))
New or Superseding Bonds
Sec. 19.247 General.
New bonds shall be required in case of insolvency or removal of any
surety, and may, at the discretion of the regional director
(compliance), be required in any other contingency affecting the
validity or impairing the efficiency of such bond. Executors,
administrators, assignees, receivers, trustees, or other persons acting
in a fiduciary capacity, continuing or liquidating the business of the
principal, shall execute and file a new bond or obtain the consent of
the surety or sureties on the existing bond or bonds. When, under the
provisions of Sec. 19.250, the surety on any bond given under this
subpart has filed an application to be relieved of liability under said
bond and the principal desires or intends to continue the business of
operations to which such bond relates, he shall file a valid superseding
bond to be effective on or before the date specified in the surety's
notice. New or superseding bonds shall show the current date of
execution and the effective date.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended, 1394, as amended
(26 U.S.C. 5175, 5176, 5551); Sec. 805(c), Pub. L. 96-39, 93 Stat. 276
(26 U.S.C. 5173))
Sec. 19.248 New or superseding bond.
(a) Operations bond. When a new or superseding operations bond is
not given as required in Sec. 19.247, the principal shall immediately
discontinue the business or distilled spirits operations to which such
bond relates.
(b) Withdrawal bond. When a new or superseding withdrawal bond is
not given as required by Sec. 19.247, the principal may not withdraw any
distilled spirits from bonded premises (other than distilled spirits
withdrawn under 26 U.S.C. 5214 or 7510) except on prior payment of tax.
(c) Unit bond. When a new or superseding unit bond is not given as
required by Sec. 19.247, the principal shall immediately discontinue the
business or distilled spirits operations to which such bond relates and
may not withdraw any distilled spirits from bonded premises (other than
distilled spirits
[[Page 307]]
withdrawn under 26 U.S.C. 5214 or 7510) except on prior payment of tax.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5175,
5176); Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))
Termination of Bonds
Sec. 19.249 Termination of bonds.
Operations, withdrawal, or unit bonds may be terminated as to
liability for future withdrawals and/or to future production or
deposits.
(a) Pursuant to application of the surety as provided in
Sec. 19.250.
(b) On approval of a superseding bond.
(c) On notification by the principal that he has discontinued
withdrawals under the bond if such bond was filed solely as a withdrawal
bond, or
(d) On notification by the principal that he has discontinued
business.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5175,
5176); Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))
Sec. 19.250 Application of surety for relief from bond.
A surety on any operations, withdrawal, or unit bond may at any time
in writing notify the principal and the regional director (compliance)
in whose office the bond is on file that he desires, after a date named,
to be relieved of liability under said bond. Such date shall be not less
than 10 days after the date the notice is received by the regional
director (compliance) in the case of a withdrawal bond, and not less
than 90 days after the date the notice is received in the case of an
operations or unit bond. The surety shall also file with the regional
director (compliance) an acknowledgment or other proof of service on the
principal. If such notice is not thereafter in writing withdrawn, the
rights of the principal as supported by said bond shall be terminated on
the date named in the notice, and the surety shall be relieved from
liability to the extent set forth in Sec. 19.251.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5175,
5176); Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))
Sec. 19.251 Relief of surety from bond.
(a) General. The surety on an operations, withdrawal, or unit bond
who has filed application for relief from liability as provided in
Sec. 19.250 shall be relieved from liability under such bond as set
forth in this section.
(b) Operations or unit bonds. Where a new or superseding bond is
filed, the surety shall be relieved of future liability with respect to
production and deposits wholly subsequent to the effective date of the
new or superseding bond. Notwithstanding such relief, the surety shall
remain liable for the tax on all distilled spirits or wines produced, or
for other liabilities incurred, during the term of the bond. Where a new
or superseding bond is not filed the surety shall, in addition to the
continuing liabilities above specified, remain liable under the bond for
all spirits or wines on hand or in transit to the bonded premises or
bonded wine cellar, as the case may be, on the date named in the notice
until all such spirits or wines have been lawfully disposed of, or a new
bond has been filed by the principal covering the same.
(c) Withdrawal or unit bonds. The surety shall be relieved from
liability for withdrawals made wholly subsequent to the date specified
in the notice, or the effective date of a new bond, if one is given.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5176,);
Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))
Sec. 19.252 Release of pledged securities.
Securities of the United States pledged and deposited as provided in
Sec. 19.234 shall be released only in accordance with the provisions of
31 CFR part 225. Such securities will not be released by the regional
director (compliance) until liability under the bond for which they were
pledged has been terminated. When the regional director (compliance) is
satisfied that they may be released, he shall fix the date or dates on
which a part or all of such securities may be released. At any time
prior to the release of such securities, the regional director
(compliance) may extend the date of release for such additional length
of time as he deems necessary.
(Ch. 290, Pub. L. 80-280, 61 Stat. 650 (31 U.S.C. 9301, 9303))
[[Page 308]]
Subpart I--Construction, Equipment and Security
Sec. 19.271 Construction of buildings
Buildings in which spirits, denatured spirits, articles, or wines
are produced, stored, or processed shall be constructed with substantial
material (e.g., masonry, concrete, wood, metal, etc.), and arranged,
equipped, and protected to provide adequate security to the revenue.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended) (26 U.S.C. 5178))
Sec. 19.272 Equipment.
The proprietor shall provide equipment suitable for the operations
conducted on the distilled spirits plant. The equipment shall also meet
the needs for revenue protection.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended) (26 U.S.C. 5178))
Sec. 19.273 Tanks.
(a) General. (1) Tanks used as receptacles for spirits, denatured
spirits, or wines shall be located, constructed, and equipped to be
suitable for the intended purpose and to allow ready examination.
(2) An accurate means of measuring the contents of each tank shall
be provided by the proprietor.
(3) When a means of mearuring is not a permanent fixture of the
tank, the tank shall be equipped with a fixed device to allow the
approximate contents to be determined readily.
(4) Tanks used for determining the tax imposed by 26 U.S.C. 5001
shall be mounted on scales and an additional suitable device shall be
provided so that the volume of the contents can be quickly and
accurately determined.
(5) The proprietor shall install walkways, landings and stairways
which will permit safe access to all parts of a tank.
(6) Tanks in which gauges required by this part are to be made shall
not be used until they are accurately calibrated and a statement of
certification of accurate calibration is included in the notice of
registration.
(7) If tanks or their fixed gauging devices are moved in location or
position subsequent to original calibration, the tanks shall not be used
until recalibrated.
(8) All tanks shall be equipped or situated so that they may be
locked or otherwise secured.
(9) Any tank vents, flame arresters, foam devices, or other safety
devices shall be constructed to prevent extraction of spirits or wines.
(b) Scale tanks. (1) Beams or dials of scale tanks used for
determining the tax imposed by 26 U.S.C. 5001 shall have minimum
graduations not greater than the following:
------------------------------------------------------------------------
Quantity to be weighed Minimum graduation
------------------------------------------------------------------------
Not exceeding 2,000 pounds............... \1/2\ pound;
Between 2,000 and 6,000 pounds........... 1 pound;
Between 6,000 and 20,000 pounds.......... 2 pounds;
Between 20,000 and 50,000 pounds......... 5 pounds;
Over 50,000 pounds....................... 10 pounds.
------------------------------------------------------------------------
(2) For scales having a capacity greater than 2,000 pounds, the
minimum quantity which may be entered onto the weighing tank scale for
gauging for tax determination shall be the greater of
(i) 1,000 times the minimum graduation of the scale or
(ii) 5 percent of the total capacity of the weighing tank scale.
(3) The weighing of lesser quantities for determination of tax may
be authorized by the regional director (compliance) where the beam of
the scale is calibrated in \1/2\ pound or 1 pound graduations and it is
found by actual test that the scales break accurately at each
graduation.
(4) Lots of spirits weighing 1,000 pounds or less shall be weighed
on scales having \1/2\ pound graduations.
(c) Testing of scale tanks. (1) Proprietors shall ensure the
accuracy of scales used for weighing lots of spirits or denatured
spirits through tests conducted at intervals of not more than 6 months,
and whenever scales are adjusted or repaired.
(2) Proprietors shall also test, at least once a month, the
gallonage represented to be in a scale tank against the gallonage
indicated by volumetric determination of the contents of the tank.
However, if the scale is not used during a month the volumetric
determination need only be verified at the next time actually used.
[[Page 309]]
(3) The volumetric determination shall be made in accordance with 27
CFR part 30, and if the variation exceeds 0.5 percent of the quantities
shown to be in the tank, the proprietor shall take appropriate steps to
have the accuracy of the scale verified.
(4) When an ATF officer determines that a tank scale may be
inaccurate, the proprietor shall have the accuracy of the scale tested.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended, 1358, as amended,
1391, as amended (26 U.S.C. 5006, 5204, 5505))
Sec. 19.274 Pipelines.
(a) General. (1) Pipelines for the conveyance of spirits, denatured
spirits, articles, or wines shall be of permanent character and
constructed, connected, arranged, and secured so as to afford adequate
protection to the revenue and to permit ready examination. However, the
regional director (compliance) may approve pipelines which may not be
readily examined if no jeopardy to the revenue is created.
(2) Where a pipeline connection must be flexible, a hose may be used
if connected and secured so as to protect the revenue.
(b) Identification. The regional director (compliance) may require
permanent pipelines for conveyance of spirits or denatured spirits to be
color coded to provide identification.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))
Sec. 19.275 Continuous distilling system.
The distilling system shall be continuous, and designed,
constructed, and connected in such a manner as to prevent the
unauthorized removal of distilled spirits.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))
Sec. 19.276 Package scales.
Proprietors shall ensure the accuracy of scales used for weighing
packages of spirits through tests conducted at intervals of not more
than 6 months or whenever scales are adjusted or repaired. However, if
the scales are not used during such period, the scales need only be
tested prior to use. Scales used to weigh packages designed to hold 10
wine gallons or less shall indicate weight in ounces or in hundredths of
a pound.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))
Sec. 19.277 Measuring devices and proofing instruments.
(a) General. Proprietors shall provide for their own use accurate
hydrometers, thermometers, and other necessary equipment to determine
proof or volume.
(b) Instruments. Hydrometers and thermometers used by proprietors to
gauge spirits shall show subdivisions or graduations of proof and
temperature which are at least as delimitated as those prescribed in 27
CFR part 30. Proprietors shall make frequent tests of their hydrometers
and thermometers, and, if they appear to be in error in excess of one
subdivision, the instruments shall not be used until they are further
tested and certified as accurate by the manufacturer or another
qualified person.
(c) Meters. The regional director (compliance) may approve
applications to measure spirits by meter for purposes other than tax
determination. Applications shall include sufficient technical data,
such as the make, model and accuracy tolerance, to enable the regional
director (compliance) to evaluate the suitability of the meter for its
intended use. Corrections for temperature of the spirits being measured
shall be made in conjunction with the volumetric measurement of spirits
by meter. If a meter does not have a temperature compensating feature,
temperature correction shall be ascertained and made from a
representative sample taken from the spirits being measured.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))
Sec. 19.278 Identification of structures, areas, apparatus,
and
equipment.
(a) Each room or enclosed area where spirits, denatured spirits,
articles, wine, distilling or fermenting materials, or containers are
held, and each building, within the plant, shall be appropriately marked
with a distinguishing number or letter.
[[Page 310]]
(b) Each tank or receptacle for spirits, denatured spirits, or wine
shall be marked to show a unique serial number and capacity.
(c) Each still, fermenter, cooker, and yeast tank shall be numbered
and marked to show its use.
(d) All other major equipment used for processing or containing
spirits, denatured spirits, or wine, or distilling or fermenting
material, and all other tanks, shall be identified as to use unless the
intended purpose is readily apparent.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))
Sec. 19.279 Office facilities.
(a) If the regional director (compliance) assigns on a continuing
basis an ATF officer to a plant to supervise operations, the proprietor
shall provide an office at the distilled spirits plant for the exclusive
use of ATF officers in performing their duties. The office shall be
provided with adequate office furniture, lighting, ventilation, heating,
and toilet and lavatory facilities. A secure cabinet, fitted for locking
with a Government lock and of adequate size, shall also be provided by
the proprietor. The office, facilities, and equipment provided by the
proprietor shall be subject to the approval of the regional director
(compliance). Where suitable facilities are otherwise available, the
regional director (compliance) may waive the requirements for a separate
Government office.
(b) If an ATF officer is not assigned to a plant on a continuing
basis, the regional director (compliance) may require the proprietor to
provide for Government use a cabinet as specified in paragraph (a) of
this section.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))
Sec. 19.280 Signs.
The proprietor shall place and keep conspicuously on the outside of
his place of business a sign showing the name of the proprietor and
denoting the business, or businesses, in which engaged.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1355, as amended (26 U.S.C. 5180))
Sec. 19.281 Security.
(a) General. The proprietor shall provide adequate security measures
at the distilled spirits plant to protect the revenue.
(b) Buildings. The buildings, rooms, and partitions shall be
constructed of substantial materials. Doors, windows, or any other
openings to the building shall be secured or fastened during times when
distilled spirits plant operations are not being conducted.
(c) Outdoor tanks. Outdoor tanks containing spirits, denatured
spirits, or wine shall be individually locked or locked within an
enclosure when they are not in use.
(d) Indoor tanks. Indoor tanks containing spirits, denatured
spirits, or wines or the rooms or buildings in which they are housed,
shall be equipped so that they may be secured.
(e) Approved locks. (1) Approved locks shall be used to secure:
(i) Outdoor tanks containing spirits in the storage account or on an
enclosure around such tanks;
(ii) Indoor tanks containing spirits in the storage account or on
the door from which access may be gained from the outside to the rooms
or buildings in which such tanks are housed; and
(iii) Any doors from which access may be gained from the outside to
rooms or buildings containing spirits in portable bulk containers in the
storage account.
(2) Approved locks shall meet the following minimum specifications:
(i) Corresponding serial number on the lock and on the key, except
for master key locking systems;
(ii) Case hardened shackle at least one-fourth inch in diameter,
with heel and toe locking;
(iii) Body width of at least 2";
(iv) Captured key feature (key may not be removed while shackle is
unlocked);
(v) Tumbler with at least 5 pins; and
(vi) Lock or key contains no bitting data.
Master key locking systems may be used at the option of the proprietor.
Locks meeting the specifications in this section are approved locks for
the purpose of 26 U.S.C. 5682. Proprietors
[[Page 311]]
who wish to use locks of unusual design, which do not meet the
specifications in this part, shall submit an example or prototype of the
lock to the Director, through the regional director (compliance), with a
request that the lock be approved for use. The Director may require
submission of the lock for testing prior to approval.
(f) Additional security. Where the regional director (compliance)
finds the construction, arrangement, equipment, or protection
inadequate, additional security shall be provided (i.e., fences, flood
lights, alarm systems, guard services) or changes in construction,
arrangement, or equipment shall be made to be extent necessary to
protect the revenue.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended, 1410, as amended
(26 U.S.C. 5178, 5682); Sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C.
5202))
Sec. 19.282 Breaking Government locks.
Where affixed, Government locks shall not be removed without the
authorization of the area supervisor or an ATF officer, except where a
person or property is in imminent danger from a disaster or other
emergency. When a disaster or other emergency occurs, and it is
impractical to first obtain authorization from an ATF officer,
Government locks may be removed, by the proprietor, or by police or
firefighters. When such action is taken, the proprietor shall see that
security measures are taken to prevent illegal removal of spirits and,
as soon as practical, shall notify the area supervisor of the action
taken and submit within 5 days a written report, executed under the
penalties of perjury, describing the emergency and the action.
(Sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5202))
Subpart J--Production
Sec. 19.311 Notice by proprietor.
(a) Commencement of operations. The proprietor shall, before
commencing production operations or resuming production operations after
having given notice of suspension, file a notice on Form 5110.34 with
the area supervisor, specifying the date on which he desires to commence
or resume operations for the production of spirits. The notice shall be
filed in accordance with the instructions on the form. The proprietor
shall not commence or resume operations prior to the time specified in
the notice.
(b) Suspension of operations. Any proprietor desiring to suspend
production operations for a period of 90 days or more shall file notice
on Form 5110.34 with the area supervisor specifying the date on which he
will suspend operations. The notice shall be filed in accordance with
instructions on the form. In case of an accident which makes it apparent
that operations cannot be conducted for 90 days or more, the proprietor
shall give immediate notice of suspension on Form 5110.34.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1364, as amended (26 U.S.C. 5221))
Sec. 19.312 Receipt of materials.
The quantities of fermenting and distilling materials (including
nonpotable chemical mixtures containing spirits produced in accordance
with Sec. 19.67), and of spirits, denatured spirits, articles, and
spirits residues, for redistillation, received on bonded premises shall
be determined by the proprietor, and reported as provided in subpart W
of this part. Fermented material (except apple cider exempt from tax
under 26 U.S.C. 5042(a)(1)) to be used in the production of spirits
shall be produced on the bonded premises where used or must be received
on the premises from (a) a bonded wine cellar, in the case of wine, or
(b) a contiguous brewery where produced, in the case of beer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1365, as amended
(26 U.S.C. 5201, 5222, 5223))
Sec. 19.313 Use of materials in production of spirits.
The proprietor may produce spirits from any suitable material in
accordance with statements of production procedure in his notice of
registration. The distillation of nonpotable chemical mixtures received
pursuant to application as provided in Sec. 19.67 shall be deemed to be
the original and continuous distillation of the spirits in such mixtures
and to constitute the production of spirits. Materials from which
[[Page 312]]
alcohol will not be produced may be used in production only if the use
of the materials is described in approved statements of production
procedure.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended
(26 U.S.C. 5172, 5178))
Sec. 19.314 Removal of fermenting material.
Material received for use as fermenting material may be removed from
or used on bonded premises for other purposes. A record of use or
removal shall be kept as provided in subpart W of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.315 Removal or destruction of distilling material.
Except as provided in this section, distilling material shall not be
removed from bonded premises before being distilled. The proprietor may
remove mash, wort, wash or other distilling material--(a) to plant
premises, other than bonded premises for use in such businesses as may
be authorized under Sec. 19.72; (b) to other premises for use in
processes not involving the production of (1) spirits, (2) alcoholic
beverages, or (3) vinegar by the vaporizing process; or (c) for
destruction. The residue of distilling material not introduced into the
production system may be removed from the premises if the liquid is
expressed from the material before removal and such liquid is not
received at any distilled spirits plant or bonded wine cellar. Residue
of beer used as distilling material may be returned to the producing
brewery. Distilling material produced and wine and beer received for use
as distilling material may be destroyed. A record of removal or
destruction shall be kept as provided in subpart W of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended, 1381, as amended
(26 U.S.C. 5222, 5370))
Sec. 19.316 Distillation.
The distillation of spirits shall be such that the spirits pass
through a continuous system from the first still or other production
equipment where access to the system would constitute a jeopardy to the
revenue until the production of the spirits is completed. The distiller
may, in the course of production, convey the product through as many
distilling or other production operations as desired, provided the
operations are continuous. Distilling operations are continuous when the
spirits are conveyed through the various steps of production as
expeditiously as plant operation will permit. The collection of
unfinished spirits for the purpose of redistillation is not deemed to be
a break in the continuity of the distilling procedure. However, the
quantity and proof of any unfinished spirits produced from distilling
materials, the quantity of which was ascertained in the manner
authorized in Sec. 19.732(c) for such materials, shall be determined and
recorded before any mingling with other materials or before any further
operations involving the unfinished spirits outside the continuous
system. Spirits may be held, prior to the production gauge, only for so
long as is reasonably necessary to complete the production procedure.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended, 1362, as amended,
1365, as amended (26 U.S.C. 5178, 5211, 5222))
Sec. 19.317 Treatment during production.
Spirits may, in the course of original and continuous distillation,
be purified or refined through, or by use of, any material which will
not remain incorporated in the finished product. Juniper berries and
other natural aromatics, or the extracted oils of such, may be used in
the distillation of gin. Spirits may be percolated through or treated
with oak chips which have not been treated with any chemical. Materials
used in treatment of spirits, and which do not remain in the spirits,
shall be destroyed or so treated as to preclude the extraction of
potable spirits therefrom.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.318 Addition of caramel to rum or brandy and addition
of oak
chips to spirits.
Caramel possessing no material sweetening properties may be added to
rum or brandy on bonded premises prior to production gauge. Oak chips
[[Page 313]]
which have not been treated with any chemical may be added to packages
prior to or after production gauge; however, notation to that effect
shall be made on the record of production gauge as provided in
Sec. 19.319.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.319 Production gauge.
(a) General. All spirits shall be gauged by determining quantity and
proof within a reasonable time after production is completed. Except as
otherwise specifically provided in this section, quantities may be
determined by volume or by weight, by approved meter, or, when approved
by the Director, by other devices or methods which accurately determine
the quantities. If caramel is added to brandy or rum, the proof of the
spirits shall be determined after the addition. Spirits in each
receiving tank shall be gauged before reduction in proof and both before
and after each removal of spirits therefrom. The gauges shall be
recorded by the proprietor in the records required by Sec. 19.736.
(b) Tax to be determined on production gauge. Tax may be determined
on the basis of the production gauge if:
(1) Spirits are weighed into bulk conveyances;
(2) Spirits are uniformly filled by weight into metal packages; or
(3) Spirits are filled by weight into packages for immediate
withdrawal from bonded premises and the details of the gauge for each
package are recorded on a package gauge record according to Sec. 19.769.
Transaction records shall be marked ``Withdrawal on Production Gauge.''
(c) Tax not to be determined on production gauge. If spirits are
drawn from the production system into barrels, drums, or similar
portable containers of the same rated capacity and the containers are
filled to capacity, and the tax is not to be determined on the basis of
the production gauge, the gauge may be made by:
(1) Weighing in a tank, converting the weight into proof gallons,
and determining the average content of each container; or
(2) Measuring volumetrically, in a calibrated tank, converting the
wine gallons determined into proof gallons, and determining therefrom
the average content of each container; or
(3) Converting the rated capacity into proof gallons to determine
the average content of each container; or
(4) Determining by a device or method approved under the provisions
of paragraph (a) of this section, the total quantity filled into
containers, and determining therefrom the average content of each
container. Rated capacity of new cooperage shall be as prescribed by
specifications of the manufacturer, or in the case of used cooperage, as
determined by the proprietor.
(d) Records of production gauge. In computing the production gauge
on the basis of average content of packages as provided in paragraph (c)
of this section, fractional proof gallons shall be rounded to the
nearest one-tenth and the average content so determined and the number
of packages filled shall be used in computing the quantity produced. A
separate gauge record, as prescribed in Sec. 19.768, shall be prepared
for each lot of packages filled (see Sec. 19.593(b)) and for each
removal by pipeline or bulk conveyance for deposit in bond on the same
plant premises. The gauge record shall indicate ``Deposit in storage''
or ``Deposit in processing.'' If spirits are to be transferred in bond,
or withdrawn from bond, as authorized by this part, the production gauge
shall be made on the form or record required by this part for the
transaction (accompanied by a package gauge record, if required). Each
transaction form or record and each package gauge record, if any, shall
show:
(1) The real name (or basic operating name as provided in
Sec. 19.280) of the producer, and, if the spirits are produced under a
trade name, the trade name under which produced.
(2) For each remnant container, the actual proof gallons in the
container.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended
(26 U.S.C. 5204, 5211))
Sec. 19.320 Identification of spirits.
At the time of production gauge, containers of spirits shall be
identified by the proprietor in accordance with subpart R of this part.
When the proprietor desires to enter spirits into bonded
[[Page 314]]
storage for subsequent packaging in wooden packages, he may identify
such spirits with the specific designation to which they would be
entitled if drawn into wooden packages, followed by the word
``Designate,'' for example, ``Bourbon Whisky Designate.''
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1360, as amended
(26 U.S.C. 5201, 5206))
Sec. 19.321 Entry.
Pursuant to the production gauge, the proprietor shall make
appropriate entry for (a) deposit of the spirits on bonded premises for
storage or processing, (b) withdrawal of the spirits on determination of
tax, (c) withdrawal of the spirits free of tax, (d) withdrawal of the
spirits without payment of tax, or (e) transfer of the spirits for
redistillation. Entry for deposit on the bonded premises of the same
plant premises shall be made on a gauge record, prepared according to
Sec. 19.768. When spirits are entered for deposit on another plant
premises or are entered for withdrawal or redistillation, the applicable
provisions of subpart K or subpart P of this part shall be followed.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5211))
Sec. 19.322 Distillates containing extraneous substances.
(a) Use in production. Distillates containing substantial quantities
of fusel oil, aldehydes, or other extraneous substances may be removed
from the distilling system prior to the production gauge for addition to
fermenting or distilling material at the distillery where produced.
Distillates removed from the distilling system under the provisions of
this paragraph shall be added promptly to the fermenting or distilling
material.
(b) Use at bonded wine cellar. Distillates containing aldehydes may
be removed, without payment of tax, to an adjacent bonded wine cellar
for use therein for fermentation of wine to be used as distilling
material at the distilled spirits plant from which the distillates were
removed. The gauge and removal of distillates to an adajcent bonded wine
cellar shall be in accordance with applicable provisions of subpart P of
this part relating to withdrawal of wine spirits for use in wine
production and the receipt and use of such distillates at an adjacent
bonded wine cellar shall be in accordance with the provisions of 27 CFR
part 240.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1365, as amended,
1382, as amended (26 U.S.C. 5201, 5222, 5373))
Formula
Sec. 19.324 Statement of production procedure or Form 5110.38.
(a) A statement of production procedure is required as provided in
Sec. 19.170 for the production of spirits from original sources or
substances.
(b) As provided in 27 CFR 5.27, an approved formula on Form 5110.38
is required for the redistillation of spirits in the production account.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1365, as amended,
1395, as amended (26 U.S.C. 5201, 5222, 5223, 5555))
Chemical By-Products
Sec. 19.326 Spirits content of chemicals produced.
All chemicals produced, including chemical by-products of the
spirits production system, shall be substantially free of spirits before
being removed from bonded premises. Except as authorized by the
Director, the spirits content of such chemicals to be removed from
bonded premises shall not exceed 10 percent by volume. Proprietors shall
test chemicals for spirits content. Records of the tests will be
maintained according to Sec. 19.736.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.327 Disposition of chemicals.
Chemicals meeting the requirements in Sec. 19.326 may be removed
from bonded premises by pipeline or in such containers as the proprietor
may desire. The quantities of such chemicals removed from bonded
premises shall be determined by the proprietor and records of removals
maintained according to Sec. 19.736. Packages of such chemicals shall be
appropriately marked by the proprietor to show the nature of
[[Page 315]]
the contents. Samples of such chemicals may be secured by ATF officers.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1365, as amended
(26 U.S.C. 5201, 5222))
Sec. 19.328 Wash water.
Water used in washing chemicals to remove spirits therefrom may be
run into a wash tank or a distilling material tank, or otherwise
properly destroyed or disposed of on the premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1356, as amended
(26 U.S.C. 5008, 5201))
Inventories
Sec. 19.329 Production inventories.
Each distiller shall take a physical inventory of the spirits and
denatured spirits in tanks and other vessels in the production account
at the close of each calendar quarter and at such other times as the
regional director (compliance) may require. The inventory shall show
separately spirits and denatured spirits received for redistillation.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Subpart K--Redistillation
Sec. 19.331 General.
Distillers or processors may redistill spirits, denatured spirits,
articles, and spirits residues. Certain products may only be redistilled
pursuant to an approved formula on Form 5110.38, as specified in 27 CFR
5.27.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended (26 U.S.C. 5223))
Sec. 19.332 Receipts for redistillation.
Proprietors may receive and redistill spirits or denatured spirits
which (a) have not been removed from bond; (b) have been withdrawn from
bond on payment or determination of tax, and are eligible for return to
bond as provided in subpart U of this part; (c) have been withdrawn from
bond free of tax or without payment of tax, and are eligible for return
to bond as provided in subpart U; or (d) have been abandoned to the
United States and sold to the proprietor without the payment of tax.
Proprietors may also receive and redistill recovered denatured spirits
and recovered articles returned under the provisions of Sec. 19.683, and
articles and spirits residues received under the provisions of
Sec. 19.684.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1365, as amended
1370, as amended (26 U.S.C. 5201, 5223, 5243); Sec. 807, Pub. L. 96-93
Stat. 285 (26 U.S.C. 5215))
Sec. 19.333 Redistillation.
Spirits shall not be redistilled at a proof lower than that
prescribed for the class and type at which such spirits were originally
produced, unless the redistilled spirits are to be used in wine
production, to be used in the manufacture of gin or vodka, or to be
designated as alcohol. Different kinds of spirits must be redistilled
separately, or with distilling material of the same kind or type as that
from which the spirits were originally produced. However, such
restriction shall not apply when (a) brandy is redistilled into
``spirits-fruit'' or ``neutral spirits-fruit'' (not for use in wine
production), (b) whiskey is distilled into ``spirits-grain'' or
``neutral spirits-grain'', (c) spirits originally distilled from
different kinds of material are redistilled into ``spirits-mixed'' or
``neutral spirits-mixed'', or (d) the spirits are redistilled into
alcohol. All spirits redistilled subsequent to production gauge shall be
treated the same as if such spirits had been originally produced by the
redistiller and all provisions of this part and 26 U.S.C. Chapter 51
(including liability for tax attaching to spirits at the time of
production) applicable to the original production of spirits shall be
applicable thereto, except that spirits recovered by redistillation of
denatured spirits, articles, or spirits residues may not be withdrawn
from bonded premises except for industrial use or after denaturation
thereof. Nothing in this section shall be construed as affecting any
provision of this chapter or of 27 CFR part 5 relating to the labeling
of distilled spirits.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended (26 U.S.C. 5223);
Sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]
[[Page 316]]
Subpart L--Storage
Sec. 19.341 General.
Proprietors who are qualified as warehousemen as provided in this
part, and who have otherwise complied with the requirements of this part
for the storage of bulk distilled spirits and wines, shall conduct such
operations pursuant to the provisions of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.342 Receipt and storage of bulk spirits and wines.
(a) Deposit. All spirits entered for deposit in the storage account
after production as provided in subpart J shall be deposited on the
bonded premises designated in the entry for deposit. Spirits withdrawn
from customs custody without payment of tax under the provisions of this
part shall be received on the bonded premises to which so withdrawn and
(unless to be immediately redistilled) shall be deposited on such
premises. Spirits transferred in bond as provided in subpart P shall be
deposited on the bonded premises designated on the transfer record.
(b) Tanks. If spirits or wines are being deposited in a partially
filled tank in storage on bonded premises, simultaneous withdrawals may
not be made therefrom unless the flow of spirits or wines into and out
of the tank isbeing measured by meters or other devices approved by the
regional director (compliance) which permit a determination of the
quantity being deposited and the quantity being removed. Proprietors
shall maintain records of spirits or wines in tanks in accordance with
subpart W of this part.
(c) Storage. Spirits or wines may be held in the storage account in
tanks or portable bulk containers on the bonded premises. When used for
such storage, containers shall be kept so that they can be readily
inspected or inventoried by ATF officers.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1362, as amended,
1366, as amended, 1398, as amended (26 U.S.C. 5201, 5211, 5212, 5232,
5601); Sec. 806(a), Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5202); Sec.
807(a), Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5231))
Sec. 19.343 Addition of oak chips to spirits and addition
of caramel to
brandy and rum.
Oak chips which have not been treated with any chemical may be added
to packages either prior to or after filling. When oak chips are added
to packages, notation of such fact shall be made on all transaction
records. Caramel possessing no material sweetening properties may be
added to rum or brandy in packages or tanks.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Filling and Changing Packages
Sec. 19.344 Filling of packages from tanks.
Spirits or wines may be drawn into packages from storage tanks on
bonded premises. The spirits or wines in the tank shall be gauged prior
to filling of packages, and when only a portion of the contents of the
tank is packaged, the spirits or wines remaining in the tank shall be
again gauged and such gauges shall be recorded by the proprietor in
records required by Secs. 19.740 and 19.768. The provisions of
Sec. 19.319 regarding the filling of packages and the taking of
production gauges of packages shall be applicable to the filling and
gauging of packages of spirits under this section.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.345 Change of packages.
Spirits or wines in storage may be transferred from one package to
another. Except in the case of spirits of 190 degrees or more proof,
each new
[[Page 317]]
package shall contain spirits from only one package. Packages shall be
marked as provided in subpart R of this part. In the case of wines, each
package shall bear the same marks as the package from which the wine was
transferred.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Mingling or Blending of Spirits
Sec. 19.346 Mingling or blending of spirits for further
storage.
The following mingling or blending operations are permissible in the
storage account of a warehouseman:
(a) Mingling of spirits distilled at 190 degrees or more of proof.
Spirits distilled at 190 degrees or more of proof, whether or not
subsequently reduced, may be mingled in storage.
(b) Mingling of spirits distilled at less than 190 degrees of proof.
Spirits distilled at less than 190 degrees of proof may be mingled for
withdrawal or further storage if--
(1) In the case of domestic spirits:
(i) Such spirits are of the same kind; and
(ii) Such spirits were produced in the same State.
(2) In the case of imported spirits:
(i) Such spirits are of the same kind;
(ii) Such spirits were produced in the same foreign country; and
(iii) Such spirits were treated, blended, or compounded in the same
foreign country and the duty was paid at the same rate.
(3) In the case of imported spirits which are recognized as
distinctive products in 27 CFR part 5:
(i) Such spirits are of the same kind;
(ii) Such spirits were produced by the same proprietor in the same
foreign country; and
(iii) Such spirits were treated, blended, or compounded by the same
proprietor in the same foreign country and the duty was paid at the same
rate.
(c) Permissible blending of beverage rums or brandies. Fruit
brandies distilled from the same kind of fruit at not more than 170
degrees of proof may, for the sole purpose of perfecting such brandies
according to commercial standards, be blended with each other, or with
any blend of such fruit brandies in storage. Rums may, for the sole
purpose of perfecting them according to commercial standards, be blended
with each other, or with any blend of rums.
(d) Packaging of mingled spirits or blended rums and brandies.
Packaging after mingling or blending shall be conducted under the
provisions of Sec. 19.344. If so desired, the mingled or blended spirits
may be returned to the packages from which they were dumped for mingling
or blending, or as many of such packages as are necessary.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1362, as amended
(26 U.S.C. 5201, 5214))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-259, 52
FR 41423, Oct. 28, 1987]
Sec. 19.347 Packages dumped for mingling.
When dumping packages of spirits of less than 190 degrees of proof
for mingling in the storage account, the proprietor shall record such
mingling on the tank record prescribed in Sec. 19.742 covering such
tank. When packages of spirits of 190 degrees or more of proof are to be
mingled, the proprietor shall record such mingling in the tank summary
record prescribed in Sec. 19.743 for all tanks of spirits of 190 degrees
or more of proof. Each package of spirits to be mingled under this
subpart shall be examined by the proprietor, and if any package bears
evidence of loss due to theft or unauthorized voluntary destruction,
such package shall not be dumped until the area supervisor has been
notified.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.348 Determining age of mingled spirits.
When spirits are mingled, the age of the spirits for the entire lot
shall be the age of the youngest spirits contained in the lot.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.349 Mingled spirits or wines held in tanks.
When spirits of less than 190 degrees of proof or wines are mingled
in a tank, the proprietor shall gauge the spirits or wines in the tank
and record the
[[Page 318]]
mingling gauge on the tank record prescribed in Sec. 19.742.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Inventories
Sec. 19.353 Storage inventories.
Each warehouseman shall take a physical inventory of all spirits and
wines held in the storage account in tanks and other vessels (except
packages) at the close of each calendar quarter and at such other times
as the regional director (compliance) may require. The inventory shall
separately identify spirits and wines. The results of the inventory
shall be recorded in accordance with subpart W of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Subpart M--Processing Operations Other Than Denaturation and Manufacture
of Articles
Sec. 19.371 General.
Proprietors, who are qualified as processors as provided in this
part, shall conduct operations relating to the manufacture, treatment,
mixing or bottling of distilled spirits on bonded premises pursuant to
the provisions of this subpart. Proprietors, who conduct operations
relating to the denaturation of spirits or the manufacture of articles
on bonded premises, pursuant to the provisions of subpart N of this
part, shall be qualified as processors.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Receipt and Use of Spirits, Wines and Alcoholic Flavoring Materials
Sec. 19.372 Receipt of spirits, wines, and alcoholic flavoring
materials for processing.
(a) Proprietors may receive into the processing account--
(1) Bulk spirits (i) from the production or storage account at the
same plant, (ii) by transfer in bond from another distilled spirits
plant, or (iii) on withdrawal from customs custody under 26 U.S.C. 5232;
(2) Wines (i) from the storage account at the same plant, or (ii) by
transfer in bond from a bonded wine cellar or another distilled spirits
plant;
(3) Spirits returned to bond under the provisions of 26 U.S.C. 5215;
or
(4) Alcoholic flavoring materials.
(b) Spirits and wines received in bulk containers or conveyances
shall be recorded as dumped on receipt, but may be retained in the
containers or conveyances in which received until used. Spirits and
wines received by pipeline shall be deposited in tanks, gauged by the
proprietor, and recorded as dumped. Alcoholic flavoring materials may be
retained in the containers in which received or may be transferred to
another container if the proprietor marks or otherwise indicates
thereon, the full identification of the original container, the date of
receipt, and the quantity deposited. Alcoholic flavoring materials and
nonalcoholic ingredients shall be considered dumped when mixed with
spirits or wines. The proof gallon content of spirits, wines, and
alcoholic flavoring materials shall be determined at the time of
dumping.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.373 Use of spirits, wines and alcoholic flavoring
materials.
A proprietor shall prepare a dump/batch record according to
Sec. 19.748 for spirits, wines, alcoholic flavoring materials, and
nonalcoholic ingredients used in the manufacture of a distilled spirits
product as follows:
(a) Dump record. When spirits, wines, or alcoholic flavoring
materials are dumped for use in the manufacture of a distilled spirits
product, and when spirits are dumped for redistillation in the
processing account, the proprietor shall prepare a dump record.
(b) Batch record. The proprietor shall prepare a batch record to
report:
(1) The dumping of spirits which are to be used immediately and in
their entirety in preparing a batch of a product manufactured under an
approved formula;
(2) The use of spirits or wines previously dumped, reported on dump
records and retained in tanks or receptacles; and
(3) Any combination of ingredients in paragraphs (b)(1) and (2) of
this section used in preparing a batch of a product
[[Page 319]]
manufactured under an approved formula.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.374 Manufacture of nonbeverage products, intermediate
products,
or eligible flavors.
Distilled spirits and wine may be used for the manufacture of
flavors or flavoring extracts of a nonbeverage nature as intermediate
products to be used exclusively in the manufacture of other distilled
spirits products on bonded premises. Nonbeverage products on which
drawback will be claimed, as provided in 26 U.S.C. 5131-5134, may not be
manufactured on bonded premises. Premises used for the manufacture of
nonbeverage products on which drawback will be claimed must be separated
from bonded premises. For purposes of computing an effective tax rate,
flavors manufactured on either the bonded or general premises of a
distilled spirits plant are not eligible flavors.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
[T.D. ATF-297, 55 FR 18063, Apr. 30, 1990]
Obscuration
Sec. 19.376 Determining obscuration.
Proprietors may determine the proof obsecuration as prescribed in 27
CFR Sec. 30.32 of spirits to be bottled on the basis of a representative
sample taken: (a) from a storage tank incident to the transfer of the
spirits to the processing account, or (b) from a tank after the spirits
have been dumped for processing, whether or not combined with other
alcoholic ingredients. The obscuration shall be determined after the
sample has been reduced to within one degree of the proof at which the
spirits will be bottled. Only water may be added to a lot of spirits to
be bottled for which the determination of proof obscuration is made from
a sample under this section. The proof obscuration for products gauged
pursuant to this section shall be frequently verified by testing samples
taken from bottling tanks prior to commencement of bottling.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))
Formulas
Sec. 19.378 Formula requirements.
An approved formula on ATF Form 5110.38 must be secured for spirits
for domestic use or export as provided in 27 CFR 5.26--5.27 before
processors may blend, mix, purify, refine, compound or treat spirits in
any manner which results in a change of character, composition, class or
type of the spirits including redistillation as provided in Sec. 19.331,
and the production of gin or vodka by other than original and continuous
distillation.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1395, as amended
(26 U.S.C. 5201, 5555))
Bottling, Packaging, and Removal of Products
Sec. 19.381 Removals from processing.
Spirits shall not be transferred from processing to the storage
account. Processors may remove--
(a) Spirits upon tax determination or withdrawal under the
provisions of 26 U.S.C. 5214 or 26 U.S.C. 7510;
(b) Spirits to the production account at the same plant for
redistillation;
(c) Bulk spirits by transfer in bond to the production or the
processing account at another distilled spirits plant for redistillation
or further processing;
(d) Spirits or wines for authorized voluntary destruction; or
(e) Wines by transfer in bond to a bonded wine cellar or to another
distilled spirits plant. However, wine may not be removed from the
bonded premises of a distilled spirits plant for consumption or sale as
wine. Spirits may be bottled and cased for removal. Spirits or wines may
be removed in any approved bulk container, by pipeline or in bulk
conveyances on compliance with the provisions of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1320, as amended,
1323, as amended, 1356, as amended, 1360, as amended, 1362, as amended,
1365, as amended, 1380, as amended (26 U.S.C. 5001, 5006, 5008, 5201,
5206, 5212, 5214, 5223, 5362))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-230, 51
FR 21748, June 16, 1986]
[[Page 320]]
Sec. 19.382 Bottling tanks.
All spirits shall be bottled from tanks listed and certified as
accurately calibrated in the notice of registration. However, the
regional director (compliance) may authorize bottling from original
packages or special containers where it is impracticable to use a
bottling tank. Bottlers desiring to bottle from packages or special
containers shall file notice with the area supervisor. The notice shall
show the necessity for the operations.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.383 Bottling tank gauge.
When a distilled spirits product is to be bottled or packaged, the
proprietor shall gauge the product, on completion of any filtering,
reduction, or other treatment, and prior to commencement of bottling or
packaging. Any gauge made under this section shall be made at labeling
or package marking proof while the product is in the tank from which it
is to be bottled or packaged, and the details of the gauge shall be
entered on the bottling and packaging record prescribed in Sec. 19.749.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.384 Preparation of bottling or packaging record.
The proprietor shall prepare a record for each batch of spirits
bottled or packaged according to the specifications in Sec. 19.749.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.385 Labels to agree with contents of tanks and
containers.
Labels affixed to containers shall agree in every respect with the
spirits in the tanks from which the containers were filled. If they do
not the proprietor shall relabel such spirits with a proper label. The
proprietor's records shall be such that they will enable ATF officers to
readily determine, by case or package serial number, which label was
used on any given filled container.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.386 Alcohol content and fill.
(a) General. (1) At representative intervals during bottling
operations, proprietors shall test and examine bottled spirits to
determine whether those spirits agree in alcohol content and quantity
(fill) with that stated on the label or bottle.
(2) If the regional director (compliance) finds that a proprietor's
test procedures do not protect the revenue and ensure label accuracy of
the bottled product, the regional director may require corrective
measures.
(b) Variations in alcohol content and fill. The proprietor shall
rebottle, recondition, or relabel spirits if the bottle contents do not
agree with the respective data on the label or bottle as to:
(1) Quantity (fill), except for such variation as may occur in
filling conducted in compliance with good commercial practice with an
overall objective of maintaining 100 percent fill for spirits bottled;
and/or
(2) Alcohol content, subject to a normal drop in alcohol content
which may occur during bottling operations not to exceed:
(i) 0.25 percent alcohol by volume for products containing solids in
excess of 600 mg per 100 ml, or
(ii) 0.25 percent alcohol by volume for all spirits products bottled
in 50 or 100 ml size bottles, or
(iii) 0.15 percent alcohol by volume for all other spirits and
bottle sizes.
For example, a product with a solids content of less than 600 mg per 100
ml, labeled as containing 40 percent alcohol by volume and bottled in a
750 ml bottle, would be acceptable if the test for alcohol content found
that it contained 39.85 percent alcohol by volume.
(c) Records. Proprietors shall record the results of all tests of
alcohol content and quantity (fill) in the record required by
Sec. 19.750.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1394, as amended
(26 U.S.C. 5201, 5301)
[51 FR 36395, Oct. 10, 1986, as amended by T.D. ATF-288, 54 FR 47770,
Nov. 17, 1989]
Sec. 19.387 Completion of bottling.
When the contents of a bottling tank are not completely bottled at
the close
[[Page 321]]
of the day, the bottler shall make entries on the bottling and packaging
record covering the total quantity bottled that day from the tank.
Entries shall be made not later than the morning of the following
business day unless the bottler maintains auxiliary or supplemental
records as provided in Sec. 19.731.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.388 Cases.
(a) General. (1) On completion of bottling, the filled bottles with
labels and properly affixed closures or other devices shall be placed in
cases, and the cases shall be sealed.
(2) Each case of spirits filled shall be marked as prescribed by
subpart R of this part before removal from such premises.
(b) Unsealed cases. (1) Cases may be temporarily retained on bonded
premises without being sealed pending the affixing to bottles of any
required labels, State stamps, or seals.
(2) Unsealed cases containing bottles without labels shall be marked
in accordance with subpart R of this part, and segregated from other
cases on bonded premises pending affixing of the labels, State stamps,
or seals.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1360, as amended
(26 U.S.C. 5201, 5206))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50
FR 23951, June 7, 1985]
Sec. 19.389 Remnants.
Where incident to bottling there remain bottles less than the number
necessary to fill a case, the bottles, after being affixed with closures
or other devices and labeled, may be marked as a remnant case as
provided in subpart R of this part or kept uncased on the bonded
premises until spirits of the same kind are again bottled. Appropriate
notation shall be made on the bottling and packaging record to cover the
bottling and disposition of the remnant. If the remnant is subsequently
used to complete the filling of a case, an accounting shall be made on
the subsequent bottling and packaging record showing the use of the
remnant by adding the remnant gallonage to the quantity to be accounted
for together with appropriate notation explaining the transactions.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1360, as amended
(26 U.S.C. 5201, 5206))
[T.D. ATF-206, 50 FR 23951, June 7, 1985]
Sec. 19.390 Filling packages.
Spirits may be drawn into packages from a tank (conforming to the
requirements of Sec. 19.273). Such packages shall be gauged by the
proprietor, and he shall report the details of such gauge on a package
gauge record, according to Sec. 19.769, and attach a copy of the package
gauge record to each copy of the bottling and packaging record covering
the product. Such packages shall be marked as prescribed by subpart R of
this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.391 Removals by bulk conveyances or pipelines.
When the spirits in the processing accounts are to be removed in
bulk conveyances or by pipeline, the proprietor shall record the filling
of the conveyance or the transfer by pipeline on the bottling and
packaging record. The spirits shall be removed from bonded premises in
accordance with subpart P of this part. The cosignor shall forward to
the consignee a statement of composition or a copy of any formula under
which such spirits were processed for determining the proper use of the
spirits, or for the labeling of the finished product. Bulk conveyances
shall be marked as provided in subpart R of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
[T.D. ATF-206, 50 FR 23951, June 7, 1985]
Sec. 19.392 Rebottling.
When the spirits are dumped for rebottling, the proprietor shall
prepare a bottling and packaging record, appropriately modified. If the
spirits were originally bottled by another proprietor, a statement from
the original bottler consenting to the rebottling must be secured by the
proprietor.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
[[Page 322]]
Sec. 19.393 Reclosing and relabeling.
The proprietor may reclose or relabel distilled spirits, either
before removal from bonded premises or after return thereto. The
reclosing or relabeling of spirits returned to bonded premises shall be
done immediately, and the spirits promptly removed. When spirits were
originally bottled by another proprietor, the relabeling proprietor
shall have on file a statement from the original bottler consenting to
the relabeling. When spirits are relabeled, the proprietor shall have a
certificate of label approval or certificate of exemption from label
approval issued under 27 CFR part 5 for labels used on relabeled
spirits. The proprietor shall prepare a separate record according to
Sec. 19.747 to cover the relabeling or reclosing. For spirits returned
to bond under 26 U.S.C. 5215(c), the proprietor shall annotate such
information on the record.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1358, as amended
(26 U.S.C. 5201, 5205); Sec. 807, Pub. L. 96-39, 93 Stat. 280 (26 U.S.C.
5215))
[T.D. ATF-206, 50 FR 23951, June 7, 1985]
Sec. 19.394 Bottled-in-bond spirits.
Spirits which are labeled as bottled-in-bond for domestic
consumption shall meet the requirements in 27 CFR part 5 and shall bear
a closure or other device as required by subpart T of this part.
(Approved by the Office of Management and Budget under control number
1512-0189)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
[T.D. ATF-206, 50 FR 23951, June 7, 1985]
Sec. 19.395 Labels for export spirits.
All bottles containing spirits bottled for export shall have
securely affixed thereto a label showing the following:
(a) Kind of spirits;
(b) Percent-alcohol-by-volume of the spirits;
(c) Net contents, unless the markings on the bottle indicate such
contents; and
(d) The name (or, if desired, the trade name) of the bottler.
The bottler may place on the label any additional information that he
may desire if it is not inconsistent with the required information. The
label information may be stated in the language of the country to which
the spirits are to be exported provided the proprietor maintains on file
an English translation of the information. The net contents and proof
may be stated in the units of measurement of the foreign country
provided the proprietor maintains a record of the equivalent units as
they would be required to be expressed if bottled for domestic
consumption. The Director may waive the requirement of showing any of
the information required by this section, other than the kind of
spirits, upon a showing that the country to which the spirits are to be
exported prohibits the showing of such information. With respect to kind
of spirits, the Director may waive the designation required by 27 CFR
5.22, only to the extent that the label need not bear the word
``diluted'' on distilled spirits bottled below the minimum bottling
proof, provided this is in accordance with the rules of the countries to
which such product is to be exported.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1374, as amended
(26 U.S.C. 5201, 5301))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-237, 51
FR 36395, Oct. 10, 1986; T.D. ATF-283, 54 FR 11704, Mar. 22, 1989]
Sec. 19.396 Spirits removed for shipment to Puerto Rico.
Spirits removed for shipment to Puerto Rico with benefit of drawback
or without payment of tax under the provisions of 27 CFR part 252 are
subject to the provisions of 27 CFR part 5 in respect to labeling
requirements and standards of fill for bottles.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, (26 U.S.C. 5201))
Sec. 19.397 Spirits not originally intended for export.
Spirits manufactured, produced, bottled in bottles, packed in
containers, or which are packaged in casks or other bulk containers in
the United States, originally intended for domestic use may be exported
with benefit of drawback or without payment of tax if the cases or bulk
containers are marked as required by 27 CFR part 252. The proprietor may
relabel the spirits to show
[[Page 323]]
any of the information provided for in Sec. 19.395. When the proprietor
desires to file a claim for drawback on spirits prepared for export
under this section, the provisions of 27 CFR 252.195b shall be followed.
When the proprietor desires to withdraw spirits without payment of tax,
he shall file a notice in accordance with 27 CFR 252.92.
(Approved by the Office of Management and Budget under control number
1512-0189)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended, 1358, as amended,
1362, as amended (26 U.S.C. 5062, 5205, 5214))
[T.D. ATF-206, 50 FR 23951, June 7, 1985]
Sec. 19.398 Alcohol.
(a) Containers. Subject to the provisions of subpart R of this part,
alcohol for industrial use may be put in bottles, packages, or other
containers. Proprietors shall comply with the provisions in subpart S of
this part when alcohol for nonindustrial domestic use is bottled.
(b) Closures. Closures or other devices shall be affixed to
containers of alcohol as provided in subpart T of this part.
(c) Bottle labels. All bottles of alcohol for industrial use shall
have affixed thereto a label showing ``Alcohol'' and the name and plant
number of the bottler. The bottler may place on the label additional
information, if it is not inconsistent with the required information.
(d) Case marks. Each case of bottled alcohol shall bear the marks
prescribed therefor in subpart R of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1369, as amended
(26 U.S.C. 5201, 5206, 5235, 5301))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50
FR 23952, June 7, 1985]
Records
Sec. 19.400 Daily summary record of spirits bottled or
packaged.
The proprietor shall maintain a separate daily summary record of
spirits bottled or packaged as provided in Sec. 19.751.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Inventories
Sec. 19.401 Inventories of wines and bulk spirits (except in packages)
in processing account.
Each proprietor shall take a physical inventory of wines and bulk
spirits (except in packages) in the processing account at the close of
each calendar quarter, and at such other time as the regional director
(compliance) may require. The results of the inventory shall be recorded
in accordance with subpart W of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.402 Inventories of bottled and packaged spirits.
(a) Physical inventories. (1) Physical inventories of bottled and
packaged spirits in the processing account shall be taken for the return
periods ending June 30 and December 31 of each year, and for other
return periods as may be required by the regional director (compliance).
(2) Physical inventories may be taken within a period of a few days
before or after June 30 or December 31 (or other dates approved by the
regional director (compliance), if:
(i) Such period does not include more than one complete weekend; and
(ii) Necessary adjustments are made to reflect pertinent
transactions, so that the recorded inventories will agree with the
actual quantities of bottled or packaged spirits on hand in processing
at the prescribed times.
(3) On approval of an application filed with the regional director
(compliance), required physical inventories may be taken on dates other
than June 30 and December 31 if the dates established for taking such
inventories:
(i) Coincide with the end of a return period, and
(ii) Are approximately six months apart.
(4) On approval of the application, the designated inventory dates
shall take effect with the first inventory scheduled to be taken within
six months of the previous June 30 or December 31 inventory.
(b) Waiver of physical inventory. (1) The regional director
(compliance), on receipt of an application, may relieve a
[[Page 324]]
proprietor of the requirement of taking the June 30 or December 31
physical inventory, (or other date approved under paragraph (a) of this
section) if he finds that only one such inventory during any 24
consecutive return periods is necessary.
(2) The regional director (compliance) may reimpose the requirement
for the waived inventory if he finds that it is necessary for law
enforcement or protection of the revenue.
(c) Notification of physical inventory. Whenever a physical
inventory of bottled or packaged spirits is to be taken, the proprietor
shall, at least 5 business days in advance, notify the area supervisor
of the date and time he will take such inventory.
(d) Supervision of physical inventories. Physical inventories
required under the provisions of this section shall be taken under such
supervision, or verified in such manner, as the regional director
(compliance) may require.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Subpart N--Denaturing Operations and Manufacture of Articles
Sec. 19.451 General.
Authorized proprietors who are qualified as processors may conduct
denaturing operations or manufacture articles pursuant to the provisions
of this part. Proprietors shall not conduct denaturing operations or
manufacture articles except as provided in this part. Records of
denaturing operations and the manufacture of articles shall be
maintained in accordance with Sec. 19.752 and Sec. 19.753.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178);
Sec. 807(a), Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5241))
Denaturation
Sec. 19.452 Formulas.
Spirits shall be denatured in accordance with formulas as authorized
in 27 CFR part 21 or their alternatives. Denaturing materials shall be
thoroughly mixed with the spirits being denatured.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242);
Sec. 807, Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5241))
Sec. 19.453 Testing of denaturants.
(a) Testing. Proprietors shall ensure that the materials they
receive for use in denaturing conform to the specifications prescribed
in 27 CFR part 21. The regional director (compliance) may require the
testing of denaturants at any time.
(b) Samples. Samples of denaturants shall be taken in such manner as
to represent a true composite of the total lot being sampled. When
samples are tested by persons other than a proprietor, a copy of the
analysis or a statement, signed by the chemist performing the test,
shall be secured and filed by the proprietor for each test. Samples of
denaturants may be taken by ATF officers at any time for testing by
Government chemists.
(c) Conformity. When a denaturant does not conform to the
specifications prescribed under 27 CFR part 21, the proprietor shall not
use the material unless he treats or manipulates the denaturant to make
it conform to such specifications. Such treated or manipulated
denaturant shall again be tested.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242))
Sec. 19.454 Gauge for denaturation.
The proprietor shall gauge spirits before denaturation and after
denaturation and record each gauge on the record of denaturation as
prescribed in Sec. 19.752(b). However, spirits dumped from previously
gauged containers or spirits transferred directly to mixing tanks from
gauge tanks where they were gauged, need not again be gauged.
Measurements of spirits and denaturants shall be made by volume, weight,
by approved meter, or, when approved by the Director, other devices or
methods.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204);
Sec. 807, Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5241))
Sec. 19.455 Dissolving of denaturants.
Denaturants which are difficult to dissolve in spirits at usual
working temperatures, which are highly volatile, or which become solid
at such usual temperatures may be liquefied or dissolved in a small
quantity of spirits or water in advance of their use in the
[[Page 325]]
production of specially denatured spirits, pursuant to the prescribed
formula, so long as the proof of the denatured spirits manufactured does
not fall below the proof prescribed for the applicable formula in 27 CFR
part 21. Any spirits used in dissolving denaturants and contained in the
resulting solution shall be included as part of the total quantity of
spirits denatured in each batch.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242))
Sec. 19.456 Adding denaturants.
Denaturants and spirits shall be mixed in packages, tanks, or bulk
conveyances on bonded premises. The regional director (compliance) may,
on written application, authorize other methods of mixing denaturants
and spirits if he deems such denaturation will not hinder effective
administration of this part or jeopardize the revenue. If requested by
the regional director (compliance), the proprietor shall submit a flow
diagram of the intended process or method of adding denaturants.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242))
Sec. 19.457 Neutralizing denatured spirits.
Proprietors may add trace quantities of compounds such as caustics
or acids to certain formulas of denatured spirits to neutralize such
spirits, if the intended effect of the denaturants is not reduced.
Proprietors who neutralize denatured spirits must record, for each
formula the kinds and quantities of compounds used, and the formula
number of the denatured spirits neutralized.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242);
Sec. 807, Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5241))
Sec. 19.458 Restoration and redenaturation of recovered
denatured
spirits and recovered articles.
Recovered denatured spirits and recovered articles received on
bonded premises, as provided in subpart U of this part, for restoration
(including redistillation, if necessary) and/or redenaturation may not
be withdrawn from bonded premises except for industrial use or after
denaturation thereof. If the recovered or restored denatured spirits or
recovered articles are to be redenatured and do not require the full
amount of denaturants for redenaturation, a notation to that effect will
be made on the record of denaturation required by Sec. 19.752(b).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242))
Sec. 19.459 Mixing of denatured spirits.
(a) Denatured spirits produced under the same formula may be mixed
on bonded premises.
(b) Denatured spirits of different formulas may be mixed on bonded
premises for immediate redistillation at the same plant or at another
plant in accordance with the provisions of subpart K of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242);
Sec. 807, Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5241))
Sec. 19.460 Conversion of denatured alcohol formulas.
(a) Conversion of Formula No. 1. Any specially denatured alcohol,
except Formulas No. 3-A and No. 30, may be converted into specially
denatured alcohol, Formula No. 1, by the addition of methyl alcohol and
either denatonium benzoate, N.F. (BITREX), methyl isobutyl ketone, mixed
isomers of nitropropane, or methyl n-butyl ketone in accordance with the
formulation prescribed in Sec. 21.32 of this chapter. For specially
denatured alcohol Formulas No. 3-A and No. 30, the methyl alcohol
content shall be reduced to the level prescribed for specially denatured
alcohol Formula No. 1 by the addition of ethyl alcohol before adding one
of the other ingredients prescribed in Sec. 21.32 of this chapter.
(b) Conversion to Formula No. 29. Any specially denatured alcohol
may be converted to specially denatured alcohol, Formula No. 29, by the
addition of acetaldehyde or ethyl acetate, in accordance with the
formulations prescribed in 27 CFR 21.56.
(c) General rule. In addition to the conversions provided in
paragraphs (a) and (b) of this section, any specially denatured alcohol
may be converted to another specially denatured alcohol
[[Page 326]]
formula, if the resultant alcohol-denaturant mixture contains only the
alcohol and denaturant or denaturants in the proportions authorized in
27 CFR part 21 for the formula to which converted. Specially denatured
alcohol which is converted under this paragraph may only be used as
authorized in 27 CFR part 21 for the formula to which converted.
(d) Conditions governing conversion and use. The quantities of
denaturants required for conversions authorized in paragraphs (a), (b)
and (c) of this section shall be determined on the basis of the alcohol
in the formulations. Specially denatured alcohol converted to Formula
No. 29 may be used as authorized in 27 CFR 21.56(b) except that it shall
not be used in the manufacture of vinegar, drugs, or medicinal
chemicals, and the conditions governing use provided in 27 CFR 21.56(c)
shall apply.
(e) Conversion to other formulations. Proprietors desiring to
convert specially denatured alcohol other than as provided in paragraphs
(a), (b), and (c) of this section shall obtain approval from the
Director prior to such conversion.
(f) Conversion to completely denatured alcohol. Any specially
denatured alcohol not containing methanol or wood alcohol may be
converted to any one of the completely denatured alcohol formulas,
prescribed in 27 CFR part 21, by adding the required denaturants.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50
FR 9160, Mar. 6, 1985]
Sec. 19.461 Receipt and storage of denatured spirits.
(a) Deposit. Denatured spirits produced, received in bond as
provided in subpart P or returned to bonded premises as provided in
subpart U of this part, shall be deposited on the bonded premises.
(b) Tanks. Proprietors shall maintain a record in accordance with
Sec. 19.752 for tanks in which denatured spirits are stored.
(c) Storage. Denatured spirits may be stored on bonded premises in
any container into which denatured spirits may be filled on bonded
premises. Such containers shall be so stored that they can be readily
inspected by ATF officers and inventoried. The provisions of Sec. 19.133
are applicable to storage of denatured spirits in portable containers.
However, upon application, the regional director (compliance) may
authorize the proprietor to store packages and cases in any manner which
safeguards the interests of the Government.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.462 Filling of containers from tanks.
Denatured spirits may be drawn into portable containers from tanks
on bonded premises. The denatured spirits in the tanks shall be gauged
prior to filling of the containers, and when only a portion of the
contents of the tank is drawn into containers, the denatured spirits
remaining in the tank shall be again gauged and such gauges shall be
recorded by the proprietor. The provisions of paragraph (a) and (c) of
Sec. 19.319 shall be applicable to the filling and gauging of portable
containers, and denatured spirits may be withdrawn from bonded premises
for any lawful purpose on the filling gauge.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.463 Containers for denatured spirits.
Packaging of denatured spirits and the marking of portable
containers of such denatured spirits shall be in accordance with
requirements of subpart R of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
Inventories
Sec. 19.464 Denatured spirits inventories.
Each proprietor shall take a physical inventory of all denatured
spirits in the processing account at the close of each calendar quarter
and at such other times as the regional director (compliance) may
require. The results of the inventory shall be recorded as provided in
subpart W of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
[[Page 327]]
Articles
Sec. 19.471 Manufacture of articles.
Proprietors shall manufacture, label, mark, and dispose of articles
as provided in 27 CFR part 20.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1372, as amended (26 U.S.C. 5273))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50
FR 9160, Mar. 6, 1985]
Subpart O--Spirits from Customs Custody
Sec. 19.481 General.
Spirits imported or brought into the United States in bulk
containers may be withdrawn by proprietors from customs custody and
transferred in such bulk containers or by pipeline without payment of
tax to the bonded premises of their distilled spirits plant. Spirits
received on bonded premises as provided in this section may be (a)
redistilled or denatured only if 185 degrees or more of proof, and (b)
withdrawn for any purpose authorized by 26 U.S.C. Chapter 51, in the
same manner as domestic spirits.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1366, as amended (26 U.S.C. 5232))
Sec. 19.482 Age and fill date.
For the purpose of this part, the age and fill date for spirits that
are imported or brought into the United States shall be:
(a) Age. The claimed age, which is supported by the documentation
required in 27 CFR part 5.
(b) Fill date. The date that packages of spirits are released from
customs custody or filled on bonded premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.483 Recording gauge.
(a) When packages of spirits are received from customs custody in
the storage account, the proprietor shall use the last official gauge to
compute and record on the deposit records prescribed in Sec. 19.740 for
each entry the average content of the packages being received which
shall also provide the basis for entries on the package summary records
prescribed in Sec. 19.741. If the last official gauge indicates a
substantial variation in the contents of the packages, the proprietor
shall group the packages into lots according to their approximate
contents, and assign a separate lot identification to each group of
packages, based on the date the packages were received on bonded
premises.
(b) When packages of spirits are received from customs custody in
the processing account, the proprietor shall determine the proof gallons
of spirits received in each package. The determination may be made by
use of the last official gauge.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5232))
Imported Spirits
Sec. 19.484 Marks on containers of imported spirits.
(a) General. Each portable bulk container of spirits shall, when
received on bonded premises under the provisions of Sec. 19.481, or when
filled on bonded premises, be marked with:
(1) The name of the importer;
(2) The country of origin;
(3) The kind of spirits;
(4) The package identification number as provided in Sec. 19.593 or
the package serial number as provided in Sec. 19.594;
(5) If filled on bonded premises, the date of fill;
(6) The proof; and
(7) The proof gallons of spirits in the package. Package
identification numbers or package serial numbers shall be preceded by
the symbol ``IMP'' and any distinguishing prefix or suffix used as
provided in Sec. 19.594. The proprietor who receives packages of
imported spirits under the provisions of Sec. 19.481 shall be
responsible for having the required marks placed on such packages.
Package identification numbers assigned under the provisions of this
section to packages of spirits received from customs custody shall be
recorded on the deposit records by the proprietor who receives the
spirits.
(b) Exception. Proprietors are relieved from placing prescribed
marks on packages when the spirits will be removed from the packages
within 30
[[Page 328]]
days of the date of receipt at the distilled spirits plant. Packages not
dumped as provided in this paragraph within the time prescribed must be
promptly marked in the manner required by Sec. 19.595. The provisions of
this section shall not be construed to waive, or authorize the waiver
of, the requirements of this part for the assigning of package
identification numbers or for the recording of such package
identification numbers on deposit records, and the required recording of
lot identification numbers and related information on other transaction
forms, records, or reports.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
Puerto Rican and Virgin Islands Spirits
Sec. 19.485 Marks on containers of Puerto Rican and Virgin
Islands
spirits.
(a) Packages received in bond. (1) When packages of Puerto Rican
spirits are received on the bonded premises of a distilled spirits plant
under the provisions of this subpart, the markings prescribed by 27 CFR
250.40, modified to show the serial number of the Form 5110.31 prefixed
by ``Form 5110.31'', rather than the serial number and identification of
the Form 487-B, shall be accepted in lieu of the markings prescribed in
Sec. 19.484. On receipt of packages so marked the proprietor of the
distilled spirits plant shall show on such packages of spirits the date
of fill as provided in Sec. 19.482, and the words ``Puerto Rican'' or
the abbreviation ``P.R.''.
(2) When packages of Virgin Islands spirits are received on the
bonded premises of a distilled spirits plant under the provisions of
this subpart, the markings prescribed by 27 CFR 250.206 that are on such
packages shall be accepted in lieu of the markings prescribed in
Sec. 19.484. On receipt of packages so marked the proprietor of the
distilled spirits plant shall show on such packages of spirits the date
of fill as provided in Sec. 19.482, and the words ``VIRGIN ISLANDS'' or
the abbreviation ``V.I.''
(b) Portable bulk containers. Portable bulk containers of Puerto
Rican or Virgin Islands spirits filled in ATF bond shall, in addition to
the required marks prescribed in Sec. 19.596, be marked to show the
serial number of the approved formula under which produced, and with the
words ``PUERTO RICAN'' or ``VIRGIN ISLANDS'' or the abbreviation
thereof. Portable bulk containers containing spirits received in ATF
bond under the provisions of this subpart shall, in addition to other
required marks, be marked with the words ``PUERTO RICAN'' or ``VIRGIN
ISLANDS'' or the abbreviation thereof.
(c) Cases of bottled alcohol. In addition to other mandatory marks
prescribed by Sec. 19.608 for cases of bottled alcohol, the words
``PUERTO RICAN'' or ``VIRGIN ISLANDS'', as appropriate, or the
abbreviation ``P.R.'' or ``V.I.'' shall precede or follow the word
``alcohol'' on cases of alcohol from Puerto Rico or the Virgin Islands
that are bottled and cased on bonded premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1369, as amended
(26 U.S.C. 5206, 5235))
Sec. 19.486 Additional tax on nonbeverage spirits.
The additional tax imposed by 26 U.S.C. 5001(a)(9), on imported
spirits withdrawn from customs custody without payment of tax and
thereafter withdrawn from bonded premises for beverage purposes, and the
related provisons of Sec. 19.518, are not applicable to Puerto Rican or
Virgin Islands spirits brought into the United States and transferred to
bonded premises under the provisions of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.487 Abatement, remission, credit or refund.
The provisions of 26 U.S.C. 5008, authorizing abatement, remission,
credit or refund for loss or destruction of distilled spirits, shall
apply to spirits brought into the United States from Puerto Rico or the
Virgin Islands, with respect to the following:
(a) Spirits lost while in ATF bond;
(b) Voluntary destruction of spirits in bond;
(c) Spirits returned to bonded premises after withdrawal from bonded
premises without payment of tax; and
[[Page 329]]
(d) Spirits returned to bonded premises after withdrawal from bonded
premises upon tax determination.
Claims relating to spirits lost in bond, in addition to the information
required by Sec. 19.41, shall show the name of the producer, and the
serial number and date of the formula, where required, under which
produced.
(Sec. 201, Pub. L. 95-859, 72 Stat. 1323, as amended (26 U.S.C. 5008);
Sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))
Subpart P--Transfer and Withdrawals
General
Sec. 19.501 Authority to withdraw.
Spirits, denatured spirits, and wines shall be removed from bonded
premises as provided in this subpart. Spirits entered into bonded
storage for subsequent packaging in wooden packages, as provided in
Sec. 19.320, which have not been drawn into such packages at the time of
withdrawal from bond shall be redesignated to conform to the classes and
types set out in subpart R of this part and in 27 CFR part 5.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1362, as amended
(26 U.S.C. 5201, 5212, 5214); Sec. 807(a), Pub. L. 96-39, 93 Stat. 285
(26 U.S.C. 5213))
Sec. 19.502 Withdrawal of spirits on production or filling
gauge.
When the production or filling gauge is made under the provisions of
Sec. 19.319(b), spirits may be withdrawn from bonded premises for any
lawful purpose on the production or filling gauge. When the production
or filling gauge is made under Sec. 19.319(c), spirits may be withdrawn
without payment of tax for export on the production or filling gauge.
When spirits which are to be withdrawn on determination of tax on the
original gauge are transferred in bond, all copies of the transfer
record prescribed in Sec. 19.770 shall be marked by the proprietor
``Withdrawal on Original Gauge''.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))
Sec. 19.503 Determination of tare.
When packages are to be individually gauged for withdrawal from
bonded premises, actual tare shall be determined in accordance with 27
CFR part 30.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))
Transfers Between Bonded Premises
Sec. 19.505 Authorized transfers.
(a) Spirits. Bulk spirits or denatured spirits may be transferred in
bond between the bonded premises of plants qualified under 26 U.S.C.
5171 or 26 U.S.C. 5181, in accordance with Secs. 19.506 and 19.998,
respectively.
(b) Wine. (1) Wines may be transferred (i) from a bonded wine cellar
to the bonded premises of a distilled spirits plant, (ii) from the
bonded premises of a distilled spirits plant to a bonded wine cellar, or
(iii) between the bonded premises of distilled spirits plants.
(2) Wines transferred to the bonded premises of a distilled spirits
plant may be used in the manufacture of a distilled spirits product, and
may not be removed from such bonded premises for consumption or sale as
wine.
(c) Alcohol for industrial purposes. Alcohol bottled for industrial
purposes, as provided in Sec. 19.398, may be transferred between the
bonded premises of distilled spirits plants in accordance with the
procedures prescribed in Secs. 19.506 through 19.510 for bulk distilled
spirits.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1380, as amended
(26 U.S.C. 5212, 5362); Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26
U.S.C. 5181))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-297, 55
FR 18064, Apr. 30, 1990]
Sec. 19.506 Application to receive spirits in bond.
When a proprietor qualified under 26 U.S.C. 5171 desires to have
spirits or denatured spirits transferred to him in bond which shall not
include spirits withdrawn from customs custody under 26 U.S.C. 5232, he
shall make application for such transfer to the regional director
(compliance) on Form 5100.16. Application to receive such spirits by
transfer in bond shall not be approved
[[Page 330]]
unless the applicant's operations or unit bond is in the maximum penal
sum, or, if in less than the maximum penal sum, is sufficient to cover
the tax on the spirits or denatured spirits to be transferred in
addition to all other liabilities chargeable against such bond. The
applicant shall deliver one of the approved copies of the application to
the consignor proprietor.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1318, as amended, 1362, as amended
(26 U.S.C. 5005, 5112))
Sec. 19.507 Termination of application.
A proprietor may terminate an approved application, Form 5100.16, at
any time by
(a) Retrieving the consignor's copy, and
(b) Returning this copy, together with his own to the regional
director (compliance) for cancellation.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1318, as amended (26 U.S.C. 5005))
Sec. 19.508 Consignor premises.
(a) General. (1) A transfer record shall be prepared according to
Sec. 19.770 by (i) the consignor proprietor of a distilled spirits plant
(A) to cover the transfer of spirits or denatured spirits in bond to
another distilled spirits plant, pursuant to an approved application on
Form 5100.16, (B) to cover the transfer in bond of spirits or denatured
spirits to an alcohol fuel plant, or (C) to cover the transfer of wine
in bond to the bonded premises of a distilled spirits plant or bonded
wine cellar; or (ii) the consignor proprietor of an alcohol fuel plant
to cover the transfer of spirits to the bonded premises of a distilled
spirits plant pursuant to an approved application on Form 5100.16.
Except as otherwise provided herein, a transfer record shall be prepared
for each conveyance. The proprietor shall also enter on the transfer
record the serial numbers of any seals or other devices affixed to a
conveyance used for shipment of spirits, or denatured spirits. On
completion of lading (or completion of transfer by pipeline), the
proprietor shall retain one copy of the transfer record and one copy of
any accompanying document for his files and forward the original of the
transfer record and any accompanying document to the consignee (to
accompany the shipment, if by truck).
(2) Spirits or denatured spirits produced from petroleum, natural
gas, or coal may not be transferred to alcohol fuel plants qualified
under 26 U.S.C. 5181.
(3) The consignor proprietor may cover on one transfer record all
packages of spirits shipped by truck on the same day from his bonded
premises to the bonded premises of another plant. In such case, the
proprietor shall prepare a shipment and delivery order for each
shipment, showing the number of packages, their package identification
or serial numbers, the name of the producer, warehouseman, or processor,
and the serial numbers of the seals or other devices (if any) applied to
the truck. Such shipping and delivery order shall be properly
authenticated and shall consititute a complete record of the spirits so
transferred in each truck each day. A copy of each shipping and delivery
order shall be retained by the consignor. On completion of the lading of
the last truck for the day, the proprietor shall retain one copy of the
transfer record and one copy of any accompanying document for his files
and forward the original of the transfer record and any accompanying
document to the consignee.
(b) Packages. When spirits are to be transferred in bond in
packages, the consignor proprietor shall weigh each package, except (1)
when the transfer is to be made in a secured conveyance, (2) when the
individual packages have been securely sealed by the proprietor, or (3)
when this requirement has been waived by the regional director
(compliance) on a finding that, because of the location of the premises
and the proposed method of operation, there will be no jeopardy to the
revenue. When packages are weighed at the time of shipment, the
proprietor shall assign temporary serial numbers to the packages and
show for each package its gross shipment weight on a package gauge
record prepared according to Sec. 19.769. A copy of the package gauge
record shall accompany each copy of the transfer record.
(c) Bulk conveyances and pipelines. When spirits, denatured spirits,
or
[[Page 331]]
wines are to be transferred in bond in bulk conveyances or by pipelines,
the consignor shall gauge the spirits, denatured spirits, or wines and
record the quantity so determined on the transfer record prescribed in
Sec. 19.770. Bulk conveyances of spirits or denatured spirits shall be
secured by the proprietor.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1367, as amended, 1380, as amended
(26 U.S.C. 5212, 5362))
Sec. 19.509 Reconsignment.
Where, prior to or on arrival at the premises of a consignee,
spirits, denatured spirits, or wines transferred in bond are found to be
unsuitable for the purpose for which intended, were shipped in error,
or, for any other bona fide reason, are not accepted by such consignee,
or are not accepted by a carrier, they may be reconsigned, by the
consignor, to himself, or to another consignee. In such case,
application to receive spirits or denatured spirits by transfer in bond
(on Form 5100.16) shall have been previously approved for the consignee
(not required in the case of wines or in the case of alcohol fuel plants
receiving spirits or denatured spirits) and the bond of the proprietor
to whom the spirits, denatured spirits, or wines are reconsigned shall
cover such spirits, denatured spirits, or wines while in transit after
reconsignment. Notice of cancellation of the shipment shall be made by
the consignor to the consignee. Where the reconsignment is to another
proprietor, a new transfer record shall be prepared and prominently
marked with the word ``Reconsignment''.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1367, as amended, 1380, as amended
(26 U.S.C. 5212, 5362))
Sec. 19.510 Consignee premises.
(a) General. When spirits, denatured spirits, or wines are received
by transfer in bond, the consignee proprietor shall examine each
conveyance to determine whether the securing devices, if any, are intact
upon arrival at his premises. If the securing devices are not intact, he
shall immediately notify the area supervisor before removal of any
spirits from the conveyance. The proprietor shall follow the provisions
of subpart Q of this part to determine, record, and report losses, if
any. After execution on the transfer record as prescribed in Sec. 19.770
or Form 703, as appropriate, of his receipt of the shipment of spirits,
denatured spirits, or wines, the consignee shall retain the original of
the transfer record and any accompanying documents for his files, or
dispose of Form 703 (in the case of wines from a bonded wine cellar), as
provided in the instructions on the form. Retained copies of transfer
records and Forms 703 shall become deposit records. Spirits which are
produced at alcohol fuel plants shall be separately identified and
accounted for as for fuel use, and may not be withdrawn, used, sold or
otherwise disposed of for other than fuel use.
(b) Packages. When spirits are received in packages, the consignee
proprietor shall weigh each package, except: (1) when the transfer is
made in a secured conveyance and the securing devices are intact on
arrival, (2) when the individual packages have been sealed by the
consignor proprietor and are intact on arrival, or (3) when the
requirement for weighing the packages at the consignor premises has been
waived under the provisions of Sec. 19.508(b)(3). The proprietor shall
record the receiving weight of each package on the accompanying package
gauge record or on a list with temporary package serial numbers prepared
by the consignor. A copy of such package gauge record or list shall
remain with the original of the transfer record.
(c) Bulk conveyances and pipelines. When spirits, denatured spirits,
or wines are received in bulk conveyances or by pipeline, the consignee
shall gauge the spirits, denatured spirits, or wines and record the
gauge on the transfer record prescribed in Sec. 19.770 or, in the case
of wines received from a bonded wine cellar, on Form 703. The consignee
shall ensure that each conveyance emptied has been thoroughly drained.
The regional director (compliance) may waive the requirement for gauging
spirits, denatured spirits, or wines on receipt by pipeline if he finds
that because of the location of the
[[Page 332]]
premises, there will be no jeopardy to the revenue.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1380, as amended
(26 U.S.C. 5204, 5362); Sec. 807(a), Pub. L. 96-39, 93 Stat. 285 (26
U.S.C. 5213))
Withdrawals on Determination and Payment of Tax
Sec. 19.515 Determination and payment of tax.
(a) General. Distilled spirits may be withdrawn from bonded premises
on determination of tax in approved containers, or, to the contiguous
premises of a manufacturer of nonbeverage products, by pipeline. All tax
which is to be prepaid or deferred shall be determined prior to the
physical removal of the spirits from bonded premises. The proprietor
shall record the results of each tax determination on a record of tax
determination as required by Sec. 19.761.
(b) Payment of tax. The tax on the spirits shall be prepaid on Form
5000.24 before removal of the spirits from bonded premises unless the
proprietor has furnished a withdrawal or unit bond to secure payment of
the tax. Where such bond is in less than the maximum penal sum, the
proprietor shall prepay the tax for any withdrawal which would cause the
outstanding liability for tax to exceed the limits of coverage under the
bond.
(Sec. 807, Pub. L. 96-39, 93 Stat. (26 U.S.C. 5213))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50
FR 51387, Dec. 17, 1985]
Sec. 19.516 Bond account.
Where the proprietor has furnished a withdrawal or unit bond to
cover the tax on spirits withdrawn on determination of tax, and such
bond is in less than the maximum penal sum, he shall maintain an account
of his bond and he shall charge the bond with the amount of liability
incurred on each withdrawal on determination of tax. He shall credit the
bond on payment of the amount of tax required to be remitted with a
return and by authorized credits taken on a return. Where a bond in less
than the maximum penal sum has been allocated among two or more plants,
as provided in Secs. 19.243 and 19.244, the proprietor shall maintain an
account at each plant of that part of the penal sum allocated to that
plant.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.517 Gauge for tax determination.
(a) Packages. When spirits in packages are to be withdrawn from
bonded premises on determination of tax on the basis of an individual
package gauge, each package shall be gauged unless the tax is to be
determined on the production or filling gauge. When packages are gauged,
the proprietor shall prepare a package gauge record, according to
Sec. 19.769, and attach it to the record of tax determination prescribed
in Sec. 19.761.
(b) Tanks. Spirits in tanks which are to be withdrawn on
determination of tax shall be gauged (by weighing and proofing) as
prescribed in Sec. 19.93, and the elements of the gauge shall be
recorded on the record of tax determination or on a separate record of
the gauge for attachment to the record of tax determination.
(c) Cases. Cases of distilled spirits to be withdrawn from bonded
premises shall be tax determined on the basis of the contents thereof.
The proof gallonage contained in cases shall be determined in accordance
with 27 CFR part 30 and the method prescribed in Sec. 19.722.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358 (26 U.S.C. 5204); Sec. 807,
Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5213))
Sec. 19.518 Imported spirits.
When spirits which have been imported for nonbeverage purposes and
transferred to bonded premises pursuant to 26 U.S.C. 5232 are withdrawn
for beverage purposes, there shall be paid, in addition to the internal
revenue tax imposed by 26 U.S.C. 5001, a tax equal to the duty which
would have been paid had the spirits been imported for beverage
purposes, less the duty already paid thereon. The additional tax shall
be referred to as ``additional tax--less duty'', and shall be paid at
the time and in the manner that the basic tax is paid. The total
quantity in proof gallons withdrawn shall be the basis of
[[Page 333]]
computing the tax at the rates indicated. The amount of the ``additional
tax--less duty'' shall be stated separately and identified as such on
the tax return.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001))
Sec. 19.519 Methods of tax payment.
The tax on spirits shall be paid pursuant to a return on Form
5000.24, filed as provided in Sec. 19.523 or Sec. 19.524 and
Sec. 19.525. Except for remittance to be effected by electronic fund
transfer under Sec. 19.524, remittance for the tax in full shall
accompany the return and may be in any form which the regional director
(compliance) is authorized to accept under the provisions of Sec. 70.61
(Payment by check or money order) and which is acceptable to him.
However, where a check or money order tendered in payment for taxes is
not paid on presentment, or where the taxpayer is otherwise in default
in payment, any remittance made during the period of such default, and
until the regional director (compliance) finds that the revenue will not
be jeopardized by the acceptance of a personal check (if acceptable to
the regional director (compliance)), shall be in cash or in the form of
a certified, cashier's, or treasurer's check drawn on any bank or trust
company incorporated under the laws of the United States, or under the
laws of any State, Territory, or possession of the United States, or a
money order, as provided in Sec. 70.61. Checks and money orders shall be
made payable to ``Bureau of Alcohol, Tobacco and Firearms''.
(Act of August 16, 1954, Ch. 736, 68A Stat. 777, as amended (26 U.S.C.
6311); Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C.
5061))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50
FR 51387, Dec. 17, 1985; T.D. ATF-251, 52 FR 19313, May 22, 1987; T.D.
ATF-301, 55 FR 47605, Nov. 14, 1990]
Sec. 19.520 Employer identification number.
The employer identification number (defined at 26 CFR 301.7701-12)
of the taxpayer who has been assigned such a number shall be shown on
each return on Form 5000.24 filed pursuant to the provisions of this
part. Failure of the taxpayer to include his employer identification
number on Form 5000.24 may result in assertion and collection of the
penalty specified in Sec. 70.113 of this chapter.
(Sec. 1, Pub. L. 87-397, 75 Stat. 828, as amended (26 U.S.C. 6109,
6676))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50
FR 51387, Dec. 17, 1985; T.D. ATF-301, 55 FR 47605, Nov. 14, 1990]
Sec. 19.521 Application for employer identification number.
(a) An employer identification number will be assigned pursuant to
application on Form SS-4 filed by the taxpayer. Form SS-4 may be
obtained from the director of the service center or from the district
director.
(b) An application on Form SS-4 for an employer identification
number shall be made by every taxpayer who files a return on Form
5000.24, but who prior to the filing of his first return on Form 5000.24
has neither secured an employer identification number nor made
application therefor. Such application on Form SS-4 shall be filed on or
before the seventh day after the date on which such first return on Form
5000.24 is filed.
(c) Each taxpayer shall make application for and shall be assigned
only one employer identification number, regardless of the number of
places of business for which the taxpayer is required to file a tax
return under the provisions of this part.
(Sec. 1, Pub. L. 87-397, 75 Stat. 828, as amended (26 U.S.C. 6109))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50
FR 51387, Dec. 17, 1985]
Sec. 19.522 Taxes to be collected by returns.
(a) Deferred taxes. The tax on spirits to be withdrawn from bond for
deferred payment of tax shall be paid pursuant to a semimonthly return
on Form 5000.24. Except as provided in section 19.523(c), the periods to
be covered by semimonthly returns on Form 5000.24 shall run from the 1st
day through the 15th day of each month, and from the 16th day through
the last day of each month. A return, Form 5000.24, shall be
[[Page 334]]
executed and filed for each semimonthly return period notwithstanding
that no tax is due for payment for such period. The proprietor of each
bonded premises shall include, for payment, on his semimonthly return on
Form 5000.24, the full amount of distilled spirits tax determined in
respect of all spirits released for withdrawal from the bonded premises
on determination of tax during the period covered by the return (except
spirits on which tax has been prepaid).
(b) Conditions under which deferral is denied. Notwithstanding the
posting of a withdrawal or unit bond by the proprietor, the tax shall be
prepaid as provided in paragraph (c) of this section--
(1) Where a proprietor has defaulted in any payment of tax under
this section, during the period of such default and until the regional
director (compliance) finds that the revenue will not be jeopardized by
deferral; or
(2) Where a proprietor, who, after having been notified of his
deficiency by the regional director (compliance) (i) fails to maintain
records required by this part to substantiate the correctness of his tax
returns or (ii) otherwise fails to comply with any provisions of this
part, is so notified by the regional director (compliance).
(c) Prepaid taxes. The tax on distilled spirits shall be paid
pursuant to a prepayment return on Form 5000.24 in all cases where the
tax is required to be paid before the spirits are withdrawn from bond. A
single prepayment return on Form 5000.24 may cover one or more
transactions. The proprietor shall note the serial number of the Form
5000.24 and the date and time such prepayment return was filed on the
individual record of tax determination.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended, 1395, as amended
(26 U.S.C. 5061, 5555))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50
FR 51387, Dec. 17, 1985; T.D. ATF-365 60 FR 33668, June 28, 1995]
Sec. 19.523 Time for filing returns.
(a) Payment pursuant to semimonthly return. Where the proprietor of
bonded premises has withdrawn spirits from such premises on
determination and before payment of tax, the proprietor shall file a
semimonthly tax return covering such spirits on Form 5000.24, and
remittance, as required by Sec. 19.524 or Sec. 19.525, not later than
the 14th day after the last day of the return period, except as provided
by paragraph (c) of this section. If the due date falls on a Saturday,
Sunday, or legal holiday, the return and remittance shall be due on the
immediately preceding day which is not a Saturday, Sunday, or legal
holiday, except as provided by paragraph (c)(3) of this section.
(b) Payment pursuant to prepayment return. If the proprietor of a
distilled spirits plant desires to withdraw spirits from bonded premises
on determination of tax and does not have on file an approved withdrawal
or unit bond of sufficient penal sum to cover the withdrawal, if there
is default by him in any payment of tax under this part, or the
proprietor is notified by the regional director (compliance) as provided
in Sec. 19.522(b)(2), the proprietor shall not remove the spirits from
the bonded premises until the tax thereon has been paid. To pay the tax,
the proprietor of the bonded premises shall file a prepayment return on
Form 5000.24, and remittance as required by Sec. 19.524 or Sec. 19.525,
before removal of the spirits.
(c) Special rule for taxes due for the month of September (effective
after December 31, 1994). (1)(i) Except as provided in paragraph
(c)(1)(ii) of this section, the second semimonthly period for the month
of September shall be divided into two payment periods, from the 16th
day through the 26th day, and from the 27th day through the 30th day.
The proprietor shall file a return on Form 5000.24, and make remittance,
for the period September 16-26, no later than September 29. The
proprietor shall file a return on Form 5000.24, and make remittance, for
the period September 27-30, no later than October 14.
(ii) Taxpayment not by electronic fund transfer. In the case of
taxes not required to be remitted by electronic fund transfer as
prescribed by Sec. 19.524, the second semimonthly period of September
shall be divided into two payment periods, from the 16th day through the
25th day, and the 26th day through the 30th day. The proprietor shall
file a return on Form 5000.24, and
[[Page 335]]
make remittance, for the period September 16-25, no later than September
28. The proprietor shall file a return on Form 5000.24, and make
remittance, for the period September 26-30, no later than October 14.
(2) Amount of payment: Safe harbor rule. (i) Taxpayers are
considered to have met the requirements of paragraph (c)(1)(i) of this
section, if the amount paid no later than September 29 is not less than
\11/15\ (73.3 percent) of the tax liability incurred for the semimonthly
period beginning on September 1 and ending on September 15, and if any
underpayment of tax is paid by October 14.
(ii) Taxpayers are considered to have met the requirements of
paragraph (c)(1)(ii) of this section, if the amount paid no later than
September 28 is not less than 2/3rds (66.7 percent) of the tax liability
incurred for the semimonthly period beginning on September 1 and ending
on September 15, and if any underpayment of tax is paid by October 14.
(3) Last day for payment. If the required taxpayment due date for
the periods September 16-25 or September 16-26 as applicable, falls on a
Saturday or legal holiday, the return and remittance shall be due on the
immediately preceding day. If the required due date falls on a Sunday,
the return and remittance shall be due on the immediately following day.
(4) Example. Payment of tax for the month of September. (i) Facts.
X, a distilled spirits plant proprietor required to pay taxes by
electronic fund transfer, incurred tax liability in the amount of
$30,000 for the first semimonthly period of September. For the period
September 16-26, X incurred tax liability in the amount of $45,000, and
for the period September 27-30, X incurred tax liability in the amount
of $2,000.
(ii) Payment requirement. X's payment of tax in the amount of
$30,000 for the first semimonthly period of September is due no later
than September 29 (Sec. 19.522(a)). X's payment of tax for the period
September 16-26 is also due no later than September 29
(Sec. 19.523(c)(1)(i)). X may use the safe harbor rule to determine the
amount of payment due for the period of September 16-26
(Sec. 19.523(c)(2)). Under the safe harbor rule, X's payment of tax must
equal $21,990.00, 11/15ths of the tax liability incurred during the
first semimonthly period of September. Additionally, X's payment of tax
in the amount of $2,000 for the period September 27-30 must be paid no
later than October 14 (Sec. 19.523(c)(1)(i)). X must also pay the
underpayment of tax, $23,010.00, for the period September 16-26, no
later than October 14 (Sec. 19.523(c)(2)).
(Approved by the Office of Management and Budget under control number
1512-0467)
[T.D. ATF-219, 50 FR 51387, Dec. 17, 1985, as amended by T.D. ATF-246,
52 FR 668, Jan. 8, 1987; T.D. ATF-365, 60 FR 33668, June 28, 1995]
Sec. 19.524 Payment of tax by electronic fund transfer.
(a) General. (1) Each taxpayer who was liable, during a calendar
year, for a gross amount equal to or exceeding five million dollars in
distilled spirits taxes combining tax liabilities incurred under this
part and parts 250 and 251 of this chapter, shall use a commercial bank
in making payment by electronic fund transfer (EFT) of distilled spirits
taxes during the succeeding calendar year. Payment of distilled spirits
taxes by cash, check, or money order, as described in Sec. 19.525, is
not authorized for a taxpayer who is required, by this section, to make
remittances by EFT. For purposes of this section, the dollar amount of
tax liability is defined as the gross tax liability on all taxable
withdrawals and importations (including distilled spirits products
brought into the United States from Puerto Rico or the Virgin Islands)
during the calendar year, without regard to any drawbacks, credits, or
refunds, for all premises from which such activities are conducted by
the taxpayer. Overpayments are not taken into account in summarizing the
gross tax liability.
(2) For the purposes of this section, a taxpayer includes a
controlled group of corporations, as defined in 26 U.S.C. 1563, and
implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except
that the words ``at least 80 percent'' shall be replaced by the words
``more than 50 percent'' in each place it appears in subsection (a) of
26 U.S.C. 1563,
[[Page 336]]
as well as in the implementing regulations. Also, the rules for a
``controlled group of corporations'' apply in a similar fashion to
groups which include partnerships and/or sole proprietorships. If one
entity maintains more than 50% control over a group consisting of
corporations and one, or more, partnerships and/or sole proprietorships,
all of the members of the controlled group are one taxpayer for the
purpose of determining who is required to make remittances by EFT.
(3) A taxpayer who is required by this section to make remittances
by EFT, shall make a separate EFT remittance and file a separate return,
ATF F 5000.24, for each distilled spirits plant from which spirits are
withdrawn upon determination of tax.
(b) Requirements. (1) On or before January 10 of each calendar year,
except for a taxpayer already remitting the tax by EFT, each taxpayer
who was liable for a gross amount equal to or exceeding five million
dollars in distilled spirits taxes during the previous calendar year,
combining tax liabilities incurred under this part and parts 250 and 251
of this chapter, shall notify the regional director (compliance), for
each region in which taxes are paid. The notice shall be an agreement to
make remittances by EFT.
(2) For each return filed in accordance with this part, the taxpayer
shall direct the taxpayer's bank to make an electronic fund transfer in
the amount of the taxpayment to the Treasury Account as provided in
paragraph (e) of this section. The request shall be made to the bank
early enough for the transfer to be made to the Treasury Account by no
later than the close of business on the last day for filing the return,
prescribed in Sec. 19.523. The request shall take into account any time
limit established by the bank.
(3) If a taxpayer was liable for less than five million dollars in
distilled spirits taxes during the preceding calendar year, combining
tax liabilities incurred under this part and parts 250 and 251 of this
chapter, the taxpayer may choose either to continue remitting the tax as
provided in this section or to remit the tax with the return as
prescribed by Sec. 19.525. Upon filing the first return on which the
taxpayer chooses to discontinue remitting the tax by EFT and to begin
remitting the tax with the tax return, the taxpayer shall notify the
regional director (compliance) by attaching a written notification to
ATF F 5000.24, stating that no taxes are due by EFT, because the tax
liability during the preceding calendar year was less than five million
dollars, and that the remittance shall be filed with the tax return.
(c) Remittance. (1) Each taxpayer shall show on the return, ATF F
5000.24, information about remitting the tax for that return by EFT and
shall file the return with ATF, in accordance with the instructions on
ATF F 5000.24.
(2) Remittances shall be considered as made when the taxpayment by
electronic fund transfer is received by the Treasury Account. For
purposes of this section, a taxpayment by electronic fund transfer shall
be considered as received by the Treasury Account when it is paid to a
Federal Reserve Bank.
(3) When the taxpayer directs the bank to effect an electronic fund
transfer message as required by paragraph (b)(2) of this section, any
transfer data record furnished to the taxpayer, through normal banking
procedures, will serve as the record of payment, and shall be retained
as part of required records.
(d) Failure to make a taxpayment by EFT. The taxpayer is subject to
a penalty imposed by 26 U.S.C. 5684, 6651, or 6656, as applicable, for
failure to make a taxpayment by EFT on or before the close of business
on the prescribed last day for filing.
(e) Procedure. Upon the notification required under paragraph (b)(1)
of this section, the regional director (compliance) will issue to the
taxpayer an ATF Procedure entitled, Payment of Tax by Electronic Fund
Transfer. This publication outlines the procedure a taxpayer is to
follow when preparing returns and EFT remittances in accordance with
this part. The U.S. Customs Service will provide the taxpayer with
[[Page 337]]
instructions for preparing EFT remittances for payments to be made to
the U.S. Customs Service.
(Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302);
Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5061))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985; 50
FR 23949, June 7, 1985, as amended by T.D. ATF-219, 50 FR 51388, Dec.
17, 1985; T.D. ATF-245, 52 FR 532, Jan. 7, 1987; T.D. ATF-251, 52 FR
19313, May 22, 1987; T.D. ATF-262, 52 FR 47559, Dec. 15, 1987]
Sec. 19.525 Manner of filing returns.
(a) Each return on Form 5000.24 shall be filed with the ATF, in
accordance with the instructions on the form. If the return and
remittance are to be filed with a designated ATF Officer, the proprietor
shall file the return and remittance no later than 2:00 p.m. on the date
the return is required to be filed.
(b) When the proprietor sends the return on Form 5000.24 by U.S.
mail, the official postmark of the U.S. Postal Service stamped on the
cover in which the return was mailed shall be considered the date of
delivery of the remittance. When the postmark on the cover is illegible,
the burden of proving when the postmark was made will be on the
proprietor. When the proprietor sends the return with or without
remittance by registered mail or by certified mail, the date of registry
or the date of the postmark on the sender's receipt of certified mail,
as the case may be, shall be treated as the date of delivery of the
return and, if accompanied, of the remittance.
(Aug. 16, 1954, ch. 736, 68A Stat. 775, as amended (26 U.S.C. 6302))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50
FR 51388, Dec. 17, 1985; T.D. ATF-251, 52 FR 19313, May 22, 1987]
Sec. 19.526 Removal of spirits on tax determination.
No spirits shall be removed from bonded premises, except as
otherwise provided by law, unless the tax thereon has been paid or
determined. A record of tax determination shall be prepared for each
removal of spirits as provided in Sec. 19.76.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5205);
Sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5213))
Withdrawal of Spirits Without Payment of Tax
Sec. 19.531 Authorized withdrawals without payment of tax.
Spirits may be withdrawn from bonded premises, without payment of
tax for:
(a) Export, as authorized under 26 U.S.C. 5214(a)(4);
(b) Transfer to customs manufacturing bonded warehouses, as
authorized under 19 U.S.C. 1311;
(c) Transfer to foreign-trade zones, as authorized under 19 U.S.C.
81c;
(d) Supplies for certain vessels and aircraft, as authorized under
19 U.S.C. 1309;
(e) Transfer to customs bonded warehouses, as authorized under 26
U.S.C. 5066 or 5214(a)(9);
(f) Use in wine production, as authorized under 26 U.S.C. 5373;
(g) Transfer to any university, college of learning, or institution
of scientific research for experimental or research use as authorized
under 26 U.S.C. 5312(a);
(h) Research, development or testing, as authorized under 26 U.S.C.
5214(a)(10). The withdrawal of spirits as provided in paragraphs (a)
through (e) of this section shall be in accordance with the regulations
in 27 CFR part 252; or,
(i) Use in the production on bonded wine cellar premises of wine and
wine products which will be rendered unfit for beverage use, as
authorized by 26 U.S.C. 5362(d). The withdrawal of spirits as provided
in paragraphs (a) through (e) of this section shall be in
[[Page 338]]
accordance with the regulations in part 252 of this chapter.
(Sec. 311, Tariff Act of 1930, 46 Stat. 691, as amended (19 U.S.C.
1311); Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1375, as
amended, 1382, as amended (26 U.S.C. 5214, 5312, 5373); Sec. 3, Pub. L.
91-659, 84 Stat. 1965, as amended (26 U.S.C. 5066); Sec. 455, Pub. L.
98-369, 98 Stat. 494 (26 U.S.C. 5214))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-227, 51
FR 13216, Apr. 18, 1986]
Sec. 19.532 Withdrawals of spirits for use in wine production.
Wine spirits may be withdrawn to a bonded wine cellar without
payment of tax for use in wine production. When wine spirits are
consigned, the proprietor shall prepare a transfer record according to
Sec. 19.770. Unless wine spirits in packages are to be withdrawn on the
production or filling gauge, the proprietor shall prepare a package
gauge record according to Sec. 19.769 and attach it to the transfer
record.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1382, as amended
(26 U.S.C. 5214, 5373))
Sec. 19.533 Withdrawal of spirits without payment of tax
for
experimental or research use.
Any scientific university, college of learning, or institution of
scientific research (which has qualified under the provisions of
Sec. 19.71 to withdraw spirits from a bonded premises), desiring to
withdraw a specific quantity of spirits for experimental or research
use, shall file a letterhead application with the regional director
(compliance) of the region in which the applicant's premises are
located.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C. 5312))
Sec. 19.534 Withdrawals of spirits for use in production
of nonbeverage
wine and nonbeverage wine products.
Spirits withdrawn without payment of tax may be removed, pursuant to
the provisions of part 24 of this chapter, to a bonded wine cellar for
use in the production of nonbeverage wine and nonbeverage wine products.
(Sec. 455, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5214))
[T.D. 372, 61 FR 20724, May 8, 1996]
Withdrawal of Spirits Free of Tax
Sec. 19.536 Authorized withdrawals free of tax.
Pursuant to the regulations in this chapter, spirits may be
withdrawn from bonded premises free of tax--
(a) On receipt of a signed photocopy of a permit, issued under part
22 of this chapter, to procure spirits for nonbeverage purposes and not
for resale or use in the manufacture of any product for sale, as
provided in 26 U.S.C. 5214(a)(3);
(b) On receipt of a signed photocopy of a permit, issued under part
22 of this chapter, to procure spirits by and for the use of the United
States or any governmental agency, any State, any political division of
a State, or the District of Columbia, for nonbeverage purposes as
provided in 26 U.S.C. 5214(a)(2);
(c) On receipt of a valid permit, issued under this part, to procure
spirits by and for the use of the United States, under the provisions of
26 U.S.C. 7510, for purposes other than as provided in paragraph (b) of
this section and 26 U.S.C. 5214(a)(2);
(d) After being specially denatured--
(1) On receipt of a signed photocopy of a permit to procure
specially denatured spirits, issued under part 20 of this chapter.
(2) For export;
(e) After being completely denatured, for any lawful purpose;
(f) When contained in an article.
(Act of August 16, 1954, Ch. 736, 68A Stat. 900 (26 U.S.C. 7510); Sec.
201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50
FR 9160, Mar. 6, 1985]
Sec. 19.537 Withdrawal of spirits free of tax.
Spirits withdrawn free of tax under Sec. 19.536 (a), (b), or (c)
shall be withdrawn in approved containers and shipped to the consignee
designated in the permit. Unless the spirits are in cases or are to be
withdrawn on the production or filling gauge, the proprietor shall gauge
each container. If the spirits are in packages which are to be gauged,
the proprietor shall prepare a package gauge record according to
Sec. 19.769, and attach it to the record of
[[Page 339]]
shipment. For each shipment the proprietor shall prepare a record of
shipment (shipping invoice, bill of lading, or another document intended
for the same purpose) and forward the original to the consignee, in
accordance with Sec. 19.779. Bulk conveyances used to transport spirits
withdrawn free of tax under this section shall be secured in accordance
with Sec. 19.96.
(Approved by the Office of Management and Budget under control number
1512-0334)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214))
[T.D. ATF-199, 50 FR 9160, Mar. 6, 1985]
Sec. 19.538 Withdrawal of spirits by the United States.
(a) Nonbeverage use. (1) Government agencies of the United States,
intending to procure specially denatured spirits or spirits free of tax
for nonbeverage purposes, shall make application for and receive a
permit, Form 5150.33, from the Director. Permits may be issued to
Government agencies of the United States for:
(i) Withdrawal and use of specially denatured spirits, in accordance
with part 20 of this chapter;
(ii) Withdrawal and use of alcohol free of tax for nonbeverage
purposes, in accordance with part 22 of this chapter; or
(iii) Importation and use of alcohol free of tax for nonbeverage
purposes, in accordance with part 251 of this chapter.
(2) All permits previously issued to Government agencies of the
United States for use of spirits or specially denatured spirits on Form
1444 shall remain valid and will be regulated by the same provisions of
this chapter as it refers to permits on Form 5150.33.
(3) A Government agency shall forward a signed copy of its permit,
Form 5150.33, for retention by the proprietor of the distilled spirits
plant for the initial purchase. Subsequent orders with the same vendor
shall refer to the permit number.
(4) In the case of a Government agency holding a single permit for
use of other sub-agencies, the signed copy of the permit shall contain
an attachment listing all other locations authorized to procure spirits
under that permit.
(5) For each shipment under this section, the proprietor shall
prepare a record of shipment and forward the original to the consignee
agency, in accordance with Sec. 19.779.
(b) Beverage use. (1) Distilled spirits may be withdrawn free of
tax, under 26 U.S.C. 7510, for use for beverage purposes by Government
agencies of the United States on receipt of a proper Government purchase
order signed by the head of the agency, or an authorized delegate.
(2) For each withdrawal under paragraph (b)(1) of this section, each
case removed shall be plainly marked ``For Use of the United States'' in
addition to the marks required by subpart R of this part.
(3) For each withdrawal under paragraph (b)(1) of this section, the
proprietor shall prepare a record containing the information required by
Sec. 19.761 for a record of tax determination. The proprietor shall mark
this record ``Free of Tax For Use of the United States.''
(Act of August 16, 1954, Ch. 736, 68A Stat. 900 (26 U.S.C. 7510); Sec.
201, Pub. L. 85-859, 72 Stat. 1370, as amended, 1375, as amended (26
U.S.C. 5271, 5313))
[T.D. T.D. ATF-199, 50 FR 9160, Mar. 6, 1985]
Sec. 19.539 Disposition of excess spirits.
Upon discontinuance of use of spirits or specially denatured spirits
withdrawn free of tax under Sec. 19.538, a Government agency may dispose
of excess spirits (a) to another Government agency (the receiving agency
is required to have a permit under part 20 or 22 if the spirits were
withdrawn for nonbeverage purposes), (b) by returning the spirits to the
proprietor of a distilled spirits plant, or (c) in any manner authorized
by the Director. In no case may such spirits be disposed of to the
general public, or otherwise than as provided in this section.
(Act of August 16, 1954, Ch. 736, 68A Stat. 900 (26 U.S.C. 7510); Sec.
201, Pub. L. 85-859, 72 Stat. 1370, as amended, 1375, as amended (26
U.S.C. 5271, 5313))
[T.D. ATF-199, 50 FR 9161, Mar. 6, 1985]
Sec. 19.540 Removal of denatured spirits and articles.
(a) Specially denatured spirits. (1) Specially denatured spirits
withdrawn free
[[Page 340]]
of tax under Sec. 19.536(d) shall be shipped in approved containers to
the consignee designated on the permit. If such spirits are for export
or for transfer to a foreign-trade zone for export or for storage
pending exportation, they shall be withdrawn under the applicable
provisions of part 252 of this chapter.
(2) Domestic specially denatured spirits may be transferred to
qualified users located in a foreign-trade zone for use in the
manufacture of articles under the applicable provisions of part 20 of
this chapter. The alcohol, as defined in 27 CFR part 20, in domestic
specially denatured spirits must be produced entirely in the United
States, including Puerto Rico.
(3) When specially denatured spirits are shipped to a qualified
user, dealer, or an applicant or prospective applicant under paragraph
(c)(2)(ii) of this section, the proprietor shall prepare a record of
shipment in accordance with Sec. 19.779. Bulk conveyances used to
transport specially denatured spirits shall be secured in accordance
with the provisions of Sec. 19.96.
(b) Completely denatured alcohol. No permit, application, or notice
is required for removal of completely, denatured alcohol from bonded
premises.
(c) Samples of denatured spirits. (1) The proprietor may take
samples of denatured spirits free of tax which may be necessary for the
conduct of business.
(2) The proprietor may furnish samples of specially denatured
spirits:
(i) To dealers in, and users of, specially denatured spirits in
advance of sales; or
(ii) To applicants or prospective applicants for permits to use
specially denatured spirits, for experimental purposes or for use in
preparing samples of a finished product for submission on request by the
Director.
(A) Proprietors shall maintain records to ensure that samples of
specially denatured spirits dispensed to a nonpermittee do not exceed
five gallons per calendar year. Records of samples of less than five
gallons shall be maintained as provided in Sec. 19.766.
(B) Samples in excess of five gallons may be furnished to
nonpermittees only after the consignee provides the proprietor with a
letterhead application approved by the regional director (compliance)
under Sec. 20.252 of this chapter. The proprietor shall retain the
approved letterhead application on file as a part of the record of
transaction.
(C) For each shipment of a sample in excess of five gallons under
paragraph (c)(2)(ii)(B) of this section, the proprietor shall prepare a
record of shipment and forward the original to the consignee, in
accordance with Sec. 19.779.
(3) Each sample of specially denatured spirits withdrawn under the
provisions of paragraph (c)(2) of this section shall have a label
affixed showing the following information:
(i) The word ``Sample'', and the words ``Specially Denatured
Alcohol'', or ``Specially Denatured Rum'', whichever is applicable;
(ii) The name, address, and plant number of the proprietor; and
(iii) The formula number.
(d) Articles. Removal of articles from bonded premises shall be in
accordance with the provisions of part 20 of this chapter.
(Approved by the Office of Management and Budget under control number
1512-0337)
(48 Stat. 999, as amended, 72 Stat. 1362, as amended, 1370, as amended
(19 U.S.C. 81c; 26 U.S.C. 5214, 5271))
[T.D. ATF-199, 50 FR 9161, Mar. 1, 1985; 50 FR 20099, May 14, 1985, as
amended by T.D. ATF-274, 53 FR 25156, July 5, 1988]
Sec. 19.541 Reconsignment.
(a) Reconsignment. When, prior to or on arrival at the consignee's
premises, spirits or specially denatured spirits withdrawn free of tax
under Sec. 19.536 are not accepted by the consignee or by a carrier, the
spirits may be reconsigned (1) to the consignor, (2) to another
proprietor for return to the bonded premises under the provisions of
Sec. 19.685, or (3) to another permittee holding a valid permit issued
under part 20 or 22 of this chapter, as applicable.
(b) Consent of surety. In case of reconsignment to bonded premises,
the provisions of Sec. 19.685, relating to consent of surety in respect
to return of spirits or specially denatured spirits withdrawn free of
tax, are applicable.
(c) Records of reconsignment. In the case of reconsignment, the
consignor
[[Page 341]]
shall cancel the initial record of shipment and prepare a new record of
shipment, if shipment is to another permittee or proprietor. The new
record of shipment shall be marked ``Reconsignment.'' File copies of the
canceled and the new record of shipment will be annotated to cross
reference each other.
(Records relating to tax-free alcohol approved by the Office of
Management and Budget under control number 1512-0334; records relating
to specially denatured spirits approved by the Office of Management and
Budget under control number 1512-0337)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
[T.D. ATF-199, 50 FR 9161, Mar. 6, 1985]
Subpart Q--Losses and Shortages
Losses
Sec. 19.561 Losses in general.
(a) Allowable losses. Except as provided in paragraph (b) of this
section, tax shall not be collected or, if paid, the tax shall be
refunded when spirits, denatured spirits or wines are lost or destroyed
while in bond.
(b) Exceptions. Tax shall be collected in the case of:
(1) Theft, unless the regional director (compliance) finds that the
theft occurred without connivance, collusion, fraud or negligence on the
part of the proprietor, owner, consignor, consignee, bailee, or carrier,
or the employees or agents of any of them;
(2) Voluntary destruction carried out other than as provided in
subpart U of this part;
(3) Unexplained shortage of bottled spirits.
(c) Burden of proof. When it appears that a loss occurred due to
theft, the burden of proof shall be on the proprietor or other person
liable for the tax to establish to the satisfaction of the regional
director (compliance) that the loss did not result from connivance,
collusion, fraud, or negligence on the part of the proprietor, owner,
consignor, consignee, bailee, or carrier, or the employees or agents of
any of them.
(d) Claims for losses allowable under this section shall be filed in
accordance with applicable provisions of subpart C of this part.
(e) Limitations. The abatement, remission, credit, or refund of
taxes on spirits, denatured spirits, or wines lost by theft shall be
allowed only to the extent that the claimant is not indemnified against
or recompensed for the taxes.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1381, as amended
(26 U.S.C. 5008, 5370))
Sec. 19.562 Determination of losses in bond.
(a) General. (1) Losses (whether by theft, unauthorized voluntary
destruction, or otherwise) of spirits, denatured spirits, and wines
shall be determined by the proprietor:
(i) Each time a tank or bulk conveyance is emptied;
(ii) On the basis of required physical inventories; and
(iii) Upon discovery of accidents or unusual variations in gauges.
(2) When it appears that any container in bond has sustained a loss
resulting from theft or unauthorized voluntary destruction, such loss
shall be taxpaid or the container shall be segregated (as necessary)
with the loss reported promptly to the area supervisor.
(3) In any instance in which spirits, denatured spirits or wines are
lost or destroyed in bond, whether by theft, unauthorized voluntary
destruction, or otherwise, the regional director (compliance) may
require the proprietor or other person liable for the tax to file a
claim for relief from the tax in accordance with Sec. 19.41.
(b) Missing packages. Whenever any packages of spirits, denatured
spirits, or wine recorded as deposited on bonded premises cannot be
located or otherwise accounted for, the proprietor shall promptly report
such fact to the area supervisor, and the proprietor shall either pay
the tax on the lost spirits, denatured spirits, or wines, or file a
claim with respect thereto under the provisions of Sec. 19.41.
(c) Tampering, material deficiency, or loss of proof. When it is
found that spirits, denatured spirits, or wines in a container have been
tampered with, or when a material deficiency in the recorded quantity of
such products is found without evidence of loss by leakage or casualty,
or when there is a loss
[[Page 342]]
of proof of such products not attributable to variations in gauging, the
proprietor shall segregate the container (as necessary) and shall
promptly report such fact to the area supervisor, unless the proprietor
acknowledges liability for the tax on the loss and elects to pay the tax
on the quantity lost.
(d) Excessive in-transit losses. Losses of spirits, denatured
spirits, or wines received in bond in bulk conveyances which exceed one
percent of the quantity of a product consigned shall be considered as
excessive in-transit losses. However, in the case of transcontinental
transfers in bond of wine, only losses in excess of two percent of the
quantity of wine consigned shall be considered as excessive in-transit
losses. The proprietor shall promptly report all such excessive in-
transit losses to the area supervisor.
(e) Storage account loss limitation. When the quantity of spirits
lost from all the storage tanks and bulk conveyances exceeds 1\1/2\
percent of the total quantity contained in the tanks and bulk
conveyances during the calendar quarter, the loss shall be taxpaid
unless a claim for remission is filed in accordance with the provisions
of Sec. 19.41 and is allowed by the regional director (compliance).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1381, as amended
(26 U.S.C. 5008, 5370))
Sec. 19.563 Loss of spirits from packages.
(a) Original quantity. Where there is evidence satisfactory to the
regional director (compliance) that any loss of spirits (including
denatured spirits) from any package deposited on bonded premises is due
to theft (except where the regional director (compliance) has made the
finding provided for in Sec. 19.561(b)) or is due to unauthorized
voluntary destruction, the regional director (compliance) may require
the immediate tax payment of the quantity of spirits so lost, except
where the extent of any loss from causes other than theft or
unauthorized voluntary destruction can be established by the proprietor
to the satisfaction of the regional director (compliance), the regional
director (compliance) may credit the tax on the loss so established
against the tax on the original quantity.
(b) Alternative method. Where there is evidence satisfactory to the
regional director (compliance) that there has been access, other than as
authorized by law, to the contents of packages entered for deposit on
bonded premises, and the extent of such access is such as to evidence a
lack of due diligence or a failure to employ necessary and effective
controls on the part of the proprietor, the regional director
(compliance) may (in lieu of the procedure prescribed in paragraph (a)
of this section) assess an amount equal to the tax on 5 proof gallons of
spirits on each of the total number of such packages as determined by
him.
(c) Applicability to packages filled after entry. The provisions of
this section apply to spirits (including denatured spirits) which are
filled into casks or packages as authorized by law, after entry and
deposit on bonded premises, whether by recasking, filling from tanks,
mingling, or otherwise. The quantity filled into those casks or packages
is considered to be the original quantity for the purpose of this
section in the case of loss from those casks or packages.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended (26 U.S.C. 5006))
Sec. 19.564 Losses after tax determination.
(a) Applicability. Pursuant to a claim, the tax on spirits which are
lost after determination of tax and before completion of physical
removal from bonded premises, may be abated or remitted or refunded or
credited without interest to the proprietor of the bonded premises where
the loss occurred.
(b) Conditions. (1) Claims for losses under this section shall be
filed in accordance with subpart C of this part.
(2) This section shall not apply if the tax would have been
collectible by reason of 26 U.S.C. 5008(a)(1) if the loss occurred on
bonded premises before determination of tax.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008))
[[Page 343]]
Shortages
Sec. 19.565 Shortages of bottled distilled spirits.
An unexplained shortage of bottled distilled spirits shall be
taxpaid: (a) Immediately on a prepayment return on Form 5000.24, or (b)
on the semimonthly return on Form 5000.24 for the return period during
which the shortage was ascertained. Unexplained shortages shall be
determined by comparing the spirits recorded to be on hand with the
results of the quantitative determination of the spirits found to be on
hand by actual count during the physical inventory required by
Sec. 19.402. When the recorded quantity is greater than the quantity
determined by the physical inventory, the difference is an unexplained
shortage. The records shall be adjusted to reflect the physical
inventory.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50
FR 51388, Dec. 17, 1985]
Subpart R--Containers and Marks
Containers
Sec. 19.581 Authorized containers.
(a) General. Proprietors shall use for any purpose of containing,
storing, transferring, conveying, removing, or withdrawing spirits or
denatured spirits under this part only containers which are authorized
by, or under the provisions of this part for such purpose, and a
container so authorized will be deemed to be an approved container for
such purpose. Except where stated otherwise, the provisions of part 20
of this chapter apply to containers used for containing, storing and
shipping of articles, and the provisions of 27 CFR part 24 apply to
containers used for storage or transfer of wine. Except for liquor
bottles, this subpart does not regulate or prohibit the use on plant
premises of any container for purposes other than containing alcoholic
substances.
(b) Alternate containers. In addition to the types of containers
specifically authorized by this part for a particular purpose, a
container of another type may be authorized for that purpose by the
Director on a finding by him that the use of such container will afford
protection to the revenue equal to or greater than that afforded by the
containers specifically authorized by this part, and that the use will
not cause administrative difficulty. If another container is so
authorized by the Director, he shall prescribe the detail and manner in
which such container shall be constructed, protected, and marked,
consistent with the provisions of this part and the extent of such use.
Similarly, where a container authorized for a particular purpose is
required by this subpart to be made of specified materials, the Director
may authorize the use of containers made of other materials which he has
found to be suitable for the intended purpose.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1362, as amended,
1374, as amended (26 U.S.C. 5206, 5212, 5214, 5301); Sec. 805, Pub. L.
96-39, 93 Stat. 279 (26 U.S.C. 5002); Sec. 807, Pub. L. 96-39, 93 Stat.
285 (26 U.S.C. 5213))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50
FR 9162, Mar. 6, 1985; T.D. 372, 61 FR 20724, May 8, 1996]
Sec. 19.582 Spirits for nonindustrial use.
(a) Determination of use. Containers of spirits of a capacity of 1
gallon (3.875 liters) or less are considered to be for nonindustrial
use, except for those which contain:
(1) Anhydrous alcohol; or
(2) Alcohol which may be withdrawn from bond free of tax.
(b) Containers. If not inconsistent with the provisions in 27 CFR
part 5, spirits for nonindustrial use may be filled into:
(1) Packages, or
(2) Other containers which are filled during processing operations
and contain not more than 10 gallons.
(c) Bottles and labels. The provisions of subpart S of this part
govern the liquor bottles and labels to be used in bottling spirits for
nonindustrial domestic use.
(d) Cases. Spirits for nonindustrial use in containers with a
capacity of 1 gallon or less shall be placed in cases which afford
reasonable protection
[[Page 344]]
against breakage. Such cases shall not be transferred in bond.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1374, as amended
(26 U.S.C. 5206, 5212, 5301))
Sec. 19.583 Spirits for industrial use.
(a) Containers. (1) Denatured spirits may be filled into glass or
metal containers of a capacity not greater than 10 gallons.
(2) Other spirits for industrial use may be filled into
(i) Containers of 1 gallon or less; or
(ii) Glass or metal containers of a capacity of 1 gallon but not
greater than 10 gallons.
(b) Encased containers. Unlabeled containers holding from 1 to 10
gallons of denatured spirits and spirits of 190 degree proof or more for
industrial use may be encased in wood, fiberboard, or similar material
if:
(1) The cases are constructed so that the surface, including the
opening, of the container is not exposed;
(2) Required marks are applied to an exterior surface of the case;
(3) The case is constructed so that the portion containing marks
will remain attached to the inner container until all the contents have
been removed; and
(4) A statement reading ``Do not remove inner container until
emptied'' or of similar meaning is placed on the portion of the case
bearing the marks.
(c) Cases. Except for encased containers, containers for denatured
spirits and spirits for industrial use of a capacity of 1 gallon or less
shall be placed in cases which afford reasonable protection against
breakage.
(d) Articles. Articles shall be packaged and labeled in accordance
with the provisions of 27 CFR part 20.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1374, as amended
(26 U.S.C. 5206, 5301))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50
FR 9162, Mar. 6, 1985; T.D. ATF-206, 50 FR 23952, June 7, 1985]
Sec. 19.584 Packages.
Packages may be used on bonded premises for original entry of
spirits, and for packaging from tanks, storing, transferring in bond,
and withdrawing from bonded premises of spirits and denatured spirits.
Packages shall be constructed so as to be capable of secure closure.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
Sec. 19.585 Bulk conveyances.
Bulk conveyances which conform to the requirements of Sec. 19.588
may be used on bonded premises for original entry of spirits, and for
filling from tanks, storing, transferring in bond, and withdrawing
taxpaid spirits and denatured spirits. Spirits may be withdrawn free of
tax, pursuant to the provisions of this part, in a bulk conveyance only
for use of the United States, or if the Director has authorized the
proprietor, as provided in Sec. 19.581, to so withdraw such spirits to a
specified consignee. Spirits may be withdrawn without payment of tax,
pursuant to the provisions of this part, in bulk conveyances for the
purposes provided in Sec. 19.531 (a), (b), (c), (e), and (f).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
Sec. 19.586 Tanks.
Tanks which conform to the requirements of Sec. 19.273 may be used
on bonded premises as containers for distilled spirits, denatured
spirits, articles, and wines.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
Sec. 19.587 Pipelines.
Pursuant to the provisions of this part, pipelines which conform to
the requirements of Sec. 19.274 may be used for (a) the conveyance on
bonded premises of spirits, denatured spirits, articles, and wines, and
(b) the conveyance to and from bonded premises of spirits, denatured
spirits, articles, and wines.
(Sec. 201, Pub. L 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
Sec. 19.588 Construction of bulk conveyances.
(a) Construction. All bulk conveyances authorized by this part shall
conform to the following:
(1) If the conveyance consists of two or more compartments, each
shall be so constructed or arranged that emptying of any compartment
will not
[[Page 345]]
afford access to the contents of any other compartment.
(2) The conveyance (or in the case of compartmented conveyances,
each compartment) shall be so arranged that it can be completely
drained.
(3) Each tank car or tank truck shall have permanently and legibly
marked thereon its number, capacity in wine gallons, and the name or
symbol of its owner.
(4) If the conveyance consists of two or more compartments, each
compartment shall be identified and the capacity of each shall be marked
thereon.
(5) A route board, or other suitable device, for carrying required
marks or brands shall be provided on each bulk conveyance.
(6) Calibrated charts showing the capacity of each compartment in
wine gallons for each inch of depth, shall be available for use in
measuring the contents of each tank truck, tank ship, or barge.
(b) Proprietor's responsibility. Before filling any bulk conveyance,
the proprietor shall examine it to ascertain that it meets the
requirements of this section and is otherwise suitable for receiving the
spirits, denatured spirits, or wines, and he shall refrain from, or
discontinue, using any such conveyance found by him or by an ATF officer
to be unsuitable.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1362, as amended
(26 U.S.C. 5206, 5212, 5214); Sec. 807, Pub. L. 96-39, 93 Stat. 285 (26
U.S.C. 5213))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50
FR 23952, June 7, 1985]
Sec. 19.589 Restrictions on disposition of bulk spirits.
(a) For nonindustrial use. Spirits for nonindustrial use may be sold
or disposed of in containers holding more than 1 wine gallon only to the
persons and for the purposes set forth in 27 CFR part 3.
(b) For industrial use. Shipment or delivery of spirits (other than
alcohol or neutral spirits) withdrawn from bond in containers holding
more than 1 wine gallon for industrial use shall, as provided in 27 CFR
part 3, be made directly to the user of the spirits.
(Sec. 201, Pub. L. 85-895, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Marks
Sec. 19.592 General.
Proprietors shall mark, identify, and label all containers of
spirits or denatured spirits as provided by this part. Containers of
wine shall be marked in accordance with 27 CFR part 24. Containers of
articles shall be marked in accordance with 27 CFR part 211.
(Sec. 201 Pub. L. 85-859, 72 Stat. 1358, as amended, 1360, as amended
(26 U.S.C. 5204, 5206))
[T.D. ATF-206, 50 FR 23952, June 7, 1985, as amended by T.D. 372, 61 FR
20724, May 8, 1996]
Sec. 19.593 Package identification numbers in production
and storage.
(a) General. Packages of spirits filled during production or storage
operations after December 31, 1979, shall be marked with a lot
identification representing the date the package is filled, and
consisting, in the order shown, as follows:
(1) The last two digits of the calendar year;
(2) An alphabetical designation from ``A'' through ``L'',
representing January through December, in that order;
(3) The digits corresponding to the day of the month; and
(4) When more than one lot is filled into packages during the same
day, for successive lots after the first lot, a letter suffix, in
alphabetical order, with ``A'' representing the second lot, ``B''
representing the third lot, and so forth.
The first three lots filled into packages on January 2, 1980, would be
identified as ``80A02'', ``80A02A'', ``80A02B''.
(b) Packages constituting a lot. Packages of spirits received from
customs custody or filled during any one day shall be given the same lot
identification subject to the following conditions:
(1) They are of the same type and either are of the same rated
capacity or are uniformly filled with the same quantity by weight or
other method provided in Sec. 19.319;
(2) They are filled with spirits of the same kind and same proof;
[[Page 346]]
(3) They are filled with spirits which are mingled in accordance
with Sec. 19.346; and
(4) They are filled with imported spirits, Puerto Rican spirits, or
Virgin Islands spirits, as applicable. Any remnant package shall itself
constitute a lot.
(c) Serial numbers. The regional director (compliance) may require
serial numbers on packages of spirits within the same lot in conjunction
with the lot identification, at the time of filling, receipt on bonded
premises, or withdrawal from bond. Proprietors shall assign temporary
serial numbers to packages for control purposes when they are
transferred in bond in an unsecured conveyance or gauged after being
tampered within the storage account.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]
Sec. 19.594 Numbering of packages and cases in processing.
(a) General. Packages of spirits and denatured spirits filled during
processing operations and cases containing bottles or other containers
of spirits and denatured spirits shall, when filled, be consecutively
numbered in a separate series by the proprietor commencing with ``1'' in
each series of serial numbers, except that any series of such numbers in
use may be continued. When the numbering in any series reaches
``1,000,000'', the proprietor may recommence the series. However, a new
series for packages of spirits and denatured spirits filled during
processing operations shall be given an alphabetical prefix or suffix.
For additional identification, separate series of serial numbers,
distinguished from each other by the use of alphabetical prefixes or
suffixes, may be established to identify size of bottles, brand names,
or other information, on written notice to the regional director
(compliance). Remnant cases shall be given the serial number of the last
full case followed by the letter R. Where there is a change in the
individual, firm, corporate name, or trade name, all series in use at
that time shall be continued. However, for a change in proprietorship, a
new series shall be commenced.
(b) Alternative method for spirits, including denatured spirits, for
industrial use. Instead of the numbering required by paragraph (a) of
this section, packages and cases of spirits, including denatured
spirits, for industrial use filled in processing may be marked with lot
identification numbers provided in Sec. 19.593.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
Sec. 19.595 Specifications for marks.
(a) Manner. (1) The proprietor shall place the prescribed marks on
cases, encased containers, and packages of spirits and denatured spirits
so that they are:
(i) Of sufficient size to be easily read;
(ii) Of a color distinctly in contrast to that of the background;
(iii) Legible; and
(iv) Durable.
(2) Cases, encased containers or packages may be marked by the use
of labels which are legible and securely affixed.
(b) Location. The required marks shall be placed on one side or
head, as applicable.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
Sec. 19.596 Marks on packages of spirits filled on bonded
premises.
(a) Packages filled in production or storage. Except as otherwise
provided in this part, packages of spirits filled in production or
storage shall be marked with:
(1) The name of the producer, or his trade name as required by
paragraph (c) of this section;
(2) The plant number of the producer, such as ``DSP-KY-708'';
(3) The kind of spirits or, in the case of distillates removed under
Sec. 19.322, the kind of distillates such as ``Grape distillate'',
``Peach distillate'', etc.;
(4) The package identification number;
(5) ``BSA'' or ``OC'' when spirits are treated with caramel or oak
chips, as the case may be;
(6) The rated capacity of the package in gallons shown as ``RC--G''.
[[Page 347]]
(7) If packages of spirits of 190 degrees or more of proof are
filled by other than the producer, the name (or trade name) and plant
number of the packaging proprietor shall be substituted for that of the
producer.
(b) Packages filled in processing. Except as otherwise provided in
this part, packages of spirits filled in processing shall be marked
with:
(1) The name of the processor, or his trade name;
(2) The plant number of the processor, such as ``DSP-KY-708'';
(3) The kind of spirits (in the case of an intermediate, the product
name shown on Form 5110.38);
(4) The serial number or lot identification number, as applicable,
and date of filling;
(5) Proof of spirits; and
(6) If manufactured under an approved formula, the serial number of
the formula.
(c) Real or trade names. The producer's real name or any trade name
authorized (as provided in Sec. 19.165), at the time of production, may
be placed on any package filled at the time of production gauge, or at
the time of original packaging of the spirits in wood when, as provided
in Sec. 19.320, the spirits were not filled into wooden packages at the
time of production gauge. When spirits have been mingled under
Sec. 19.346, the proprietor may use any of the names represented in the
mingled spirits, but no other name, as the name of the producer to be
marked on packages filled with such mingled spirits. However, if the
proprietor was the actual producer of the spirits, he may in any case
use his real name. The processor's real name or any trade name
authorized (as provided in Sec. 19.165) may be placed on any package
filled with spirits during processing operations.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
Sec. 19.597 Kind of spirits.
(a) Designation. The designations as to kind of spirits required by
Sec. 19.596 shall be in accordance with the classes and types of spirits
set out in 27 CFR part 5, except that:
(1) Spirits distilled at more than 160 degrees of proof, which lack
the taste, aroma, and other characteristics generally attributed to
whisky, brandy, rum, or gin, and which are substantially neutral in
character, may be designated as ``Alcohol''. When alcohol is withdrawn
on determination of tax, the designation shall consist of the word
``Alcohol'' preceded or followed by a word or phrase descriptive of the
material from which the alcohol was produced.
(2) The designations for vodka, neutral spirits, or gin shall
include a word or phrase descriptive of the material from which the
spirits so designated were produced.
(3) Spirits distilled at less than 190 degrees of proof which lack
the taste, aroma, and other characteristics generally attributed to
whisky, brandy, rum, or gin, may be designated ``Spirits'', preceded or
followed by a word or phrase descriptive of the material from which
produced. However, spirits distilled on or after July 1, 1972, as
provided in this paragraph may not be designated ``Spirits grain'' or
``Grain spirits''.
(4) Spirits distilled from fruit at or above 190 degrees of proof,
if intended for use in wine production, shall be designated ``Neutral
Spirits--Fruit'', preceded or followed by the name of the fruit from
which produced.
(5) Spirits distilled at not more than 160 degrees of proof from a
fermented mash of not less than 51 percent rye, corn, wheat, malted
barley, or malted rye grain, packaged in reused cooperage, may be
designated ``Whisky'' if further qualified with the words ``Distilled
from rye mash'' (or bourbon, wheat, malt, or rye malt mash, as the case
may be). However, such spirits shall, if distilled from a fermented mash
of not less than 80 percent corn, be designated ``Corn Whisky.''
(b) Change of designation. A proprietor may, on written application
to, and approval of the regional director (compliance), change the
original designation for spirits at any time, before their withdrawal
from bonded premises, to a new designation properly describing the
spirits in accordance with the provisions of this section.
(c) Other designations. If the proprietor proposes to produce
spirits for
[[Page 348]]
which a designation has not been prescribed, he shall first make written
application to the Director for a designation for such spirits and such
spirits shall be branded accordingly.
(d) Spirits for nonindustrial use. The provisions of this section
shall not be construed as authority for applying designations to spirits
withdrawn for nonindustrial use which designations do not comply with
provisions of 27 CFR part 5.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
Sec. 19.598 [Reserved]
Sec. 19.599 Change of packages in storage.
When spirits are transferred from one package to another as
authorized in Sec. 19.345, each new package shall be given the same
package identification number and marks as the original package. The
proprietor shall prepare and sign a label to be affixed to the head of
each new package in the manner prescribed for affixing distilled spirits
stamps. The label shall be in the following form:
The spirits in this ____________________, (kind of
cooperage)____________________, (Barrel or drum) package identification
No.____________________, were transferred from a__________________,
____________________, (kind of cooperage)____________________, (Barrel
or drum) on____________________, (Date),
_______________________________________________________________________
(Proprietor)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
Sec. 19.600 [Reserved]
Sec. 19.601 Marks on containers of specially denatured
spirits.
(a) General. Each package, case, and encased container of specially
denatured spirits filled on bonded premises shall be marked or labeled
to show:
(1) Quantity in gallons;
(2) Serial number or lot identification number;
(3) Plant number of the proprietor;
(4) Designation or abbreviation of the specially denatured spirits
by kind (alcohol or rum);
(5) Formula number; and
(6) Proof of spirits which were denatured at other than 190 degrees
of proof.
(b) Bottles. Each bottle shall be marked or labeled to show the
information prescribed in paragraph (a)(1), (3), (4), (5), and (6) of
this section.
(c) Alternate formulations. When spirits are denatured under a
formula authorizing a choice of types and quantities of denaturants, the
container or case shall be marked to show actual types and quantities of
denaturants used.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
Sec. 19.602 Marks on containers of completely denatured
alcohol.
Each container of completely denatured alcohol, except pipelines and
bulk conveyances, shall have marked on the head of the package, or side
of the can or carton, the name of the proprietor by whom the containers
were filled, the plant number where filled, the contents in wine
gallons, the apparent proof, the words ``Completely Denatured Alcohol'',
and the formula number.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended) (26 U.S.C. 5206))
Sec. 19.603 [Reserved]
Sec. 19.604 Caution label.
Each container of completely denatured alcohol containing five
gallons or less, sold or offered for sale, shall be labeled to show, in
plain, legible letters, the words ``Completely Denatured Alcohol'' and
the following statement ``Caution--contains poisonous ingredients.'' The
name and address of the denaturer may be printed on such label, but no
other extraneous matter will be permitted thereon without the approval
of the Director. The word ``pure'', qualifying denatured alcohol, will
not be permitted to appear on the label or the container.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50
FR 9162, Mar. 6, 1985]
[[Page 349]]
Sec. 19.605 Additional marks on portable containers.
(a) In addition to the other marks required by this part, portable
containers (other than bottles enclosed in cases) of spirits or
denatured spirits to be withdrawn from the bonded premises:
(1) Without payment of tax, for export, transfer to customs
manufacturing bonded warehouses, transfer to foreign-trade zones or
supplies for certain vessels and aircraft, shall be marked as provided
in 27 CFR part 252; or
(2) Tax-free alcohol shall be marked with the word ``Tax-Free.''
(b) The proprietor may show other information such as brand or trade
name; caution notices and other material required by Federal, State, or
local law or regulations; wine or proof gallons; and plant control data.
However, marks or attachments shall not conceal, obscure, interfere with
or conflict with the markings required by this subpart.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
Sec. 19.606 Marks on bulk conveyances.
(a) The proprietor shall securely attach to the route board, or
other suitable device, of each bulk conveyance used to transport spirits
or denatured spirits, a label to identify each conveyance or compartment
as follows:
(1) Name, plant number, and location of the consignor;
(2) Name, plant number, permit number, or registry number (as
applicable), and location of the consignee;
(3) Date of shipment;
(4) Quantity (proof gallons for spirits, wine gallons for denatured
spirits); and
(5) Formula number for denatured spirits.
(b) The provisions of paragraph (a) of this section shall not apply
when the conveyance is accompanied by documentation which contains the
information required by paragraph (a) of this section.
(c) In addition, export shipments shall conform to the requirements
of 27 CFR part 252.
(d) Bulk conveyances used to transport articles or wine shall
conform to the requirements of part 20 or 240 of this chapter, as
applicable.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50
FR 9162, Mar. 6, 1985]
Sec. 19.607 Marks on cases.
(a) Mandatory marks. Except for cases marked as provided in
Sec. 19.608, the following information shall be plainly marked on each
case of spirits filled in processing:
(1) Serial number;
(2) Kind of spirits;
(3) Plant number where bottled;
(4) Date filled;
(5) Proof; and
(6) Liters or proof gallons.
Cases removed for export, transfer to customs bonded warehouses or
customs manufacturing bonded warehouses, transfer to foreign-trade
zones, or for use as supplies on certain vessels and aircraft, shall
bear the additional marks required by 27 CFR part 252.
(b) Other marks. In addition to the required marks on cases filled
in processing, the proprietor may include other marks such as;
(1) Name or trade name, and location of desired, of the bottler, and
in conjunction therewith the word ``Bottler'';
(2) For products actually distilled or processed by the proprietor,
his name or trade name, and location, if desired, and in conjunction
therewith the words ``Distiller'' or ``Processor'' as applicable;
(3) For products actually imported and bottled by the proprietor,
the words ``Imported and Bottled By'', followed by his name or trade
name, and location if desired;
(4) For products bottled for a dealer, the words ``Bottled For'',
followed by the name of such dealer;
(5) Other material required by Federal or State law and regulations;
or
(6) Labels or data describing the contents for commercial
identification or accounting purposes, or indicating payment of State or
local taxes.
[[Page 350]]
The marks authorized by this paragraph shall not interfere with or
detract from the mandatory marks prescribed in paragraph (a) of this
section.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206);
Sec. 3(a), Pub. L. 91-659, 84 Stat. 1965, as amended (26 U.S.C. 5066))
Sec. 19.608 Cases of industrial alcohol.
(a) Mandatory marks. Each case, including encased containers, of
alcohol bottled for industrial use in accordance with subpart M of this
part shall be marked as applicable, to show--
(1) ``Alcohol'';
(2) Serial number or lot identification number;
(3) Plant number;
(4) Proof;
(5) Proof gallons;
(6) ``Tax-Free''; and
(7) Information required by 27 CFR part 252, for cases withdrawn for
export, transferred to customs bonded warehouses, transferred to
foreign-trade zones, or supplies for certain vessels and aircraft.
(b) Other marks. Cases may be marked with other marks which do not
interfere with or detract from mandatory case marks in the manner
permitted by Sec. 19.607.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1369, as amended
(26 U.S.C. 5206, 5235))
Sec. 19.609 [Reserved]
Sec. 19.610 Obliteration of marks.
Except as provided in Sec. 19.597(b), the marks required by this
part to be placed on any container or case shall not be destroyed or
altered before the container or case is emptied.
(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5206))
[T.D. ATF-206, 50 FR 23952, June 7, 1985]
Sec. 19.611 Relabeling and reclosing off bonded premises.
The proprietor of a distilled spirits plant may relabel, affix brand
labels, or reclose bottled taxpaid spirits on wholesale liquor dealer
premises or at a taxpaid storeroom on, contiguous to, adjacent to, or in
the immediate vicinity of the plant, if such wholesale liquor dealer
premises or taxpaid storeroom is operated in connection with the plant.
If products which are relabeled under this section were originally
bottled by another proprietor, the relabeling proprietor shall have on
file a statement from the original bottler consenting to the relabeling.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
[T.D. ATF-206, 50 FR 23952, June 7, 1985]
Sec. 19.612 Authorized abbreviations to identify marks.
In addition to the abbreviations and symbols which are authorized in
this part for use in marking containers, the following abbreviations may
be used to identify certain marks:
------------------------------------------------------------------------
Mark Abbreviation
------------------------------------------------------------------------
Completely Denatured Alcohol............... CDA
Distilled Spirits Stamps................... DSS
Gallon or Wine Gallon...................... WG
Gross Weight............................... G
Proof...................................... P
Specially Denatured:
Alcohol................................ SDA
Rum.................................... SDR
Tare....................................... T
Tax Determined............................. TD
Wine Spirits Addition...................... WSA
------------------------------------------------------------------------
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]
Subpart S--Liquor Bottle and Label Requirements
Sec. 19.631 Scope of subpart.
The provisions of Secs. 19.632 through 19.639 of this subpart shall
apply only to liquor bottles having a capacity of 200 ml or more except
where expressly applied to liquor bottles of less than 200 ml capacity.
The provisions of Secs. 19.641 through 19.650 of this subpart shall
apply to all liquor bottles, regardless of size.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1374, as amended
(26 U.S.C. 5206, 5301))
Liquor Bottle Requirements
Sec. 19.632 Bottles authorized.
Liquor bottles for domestic use shall conform to the applicable
standards of fill provided in subpart E of 27 CFR
[[Page 351]]
part 5, including those for liquor bottles of less than 200 ml capacity.
The use of any bottle size other than as authorized in subpart E of 27
CFR part 5 is prohibited for the bottling of nonindustrial distilled
spirits for domestic purposes.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))
Sec. 19.633 Distinctive liquor bottles.
(a) Application. A proprietor desiring approval of domestic liquor
bottles of distinctive shape or design, including bottles of less than
200 ml capacity, or, to use such distinctive liquor bottles, shall
submit ATF Form 5100.31 to the Director for approval. The applicant
shall certify as to the total capacity of a representative sample bottle
before closure (expressed in milliliters) on each copy of the form. In
addition, the applicant shall affix a readily legible photograph (both
front and back of the bottle) to the front of each copy of ATF Form
5100.31, along with the label(s) to be used on the bottle. The applicant
shall not submit an actual bottle or an authentic model unless
specifically requested to do so.
(b) Approval. Properly submitted ATF Forms 5100.31 for approval of
distinctive liquor bottles shall be approved by the Director if the
bottles are found to--
(1) Meet the requirements of 27 CFR part 5;
(2) Be distinctive;
(3) Be suitable for their intended purpose;
(4) Not jeopardize the revenue; and
(5) Not be deceptive to the consumer.
The applicant shall keep a copy of the approved ATF Form 5100.31,
including an approved photograph (both front and back) of the
distinctive liquor bottle, on file at his premises. If ATF Form 5100.31
is disapproved, the applicant shall be notified of the Director's
decision and the reasons therefor.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-242, 51
FR 39525, Oct. 29, 1986
Sec. 19.634 Receipt and storage of liquor bottles.
No proprietor shall accept shipment or delivery of liquor bottles
except from the manufacturer thereof, a supplier abroad, or another
proprietor. However, the regional director (compliance) may, pursuant to
letterhead application, authorize a proprietor to receive and reuse
liquor bottles assembled for such proprietor as provided in 27 CFR
194.263. Liquor bottles, including those of less than 200 ml capacity,
shall be stored in a safe and secure place, either on the proprietor's
qualified premises or at another location.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))
Sec. 19.635 Bottles to be used for display purposes.
Liquor bottles may be furnished to liquor dealers for display
purposes, provided that each bottle is marked to show that it is to be
used for such purpose. The disposition of such bottles, showing names
and addresses of consignees, dates of shipment, and size, quantity, and
description of bottles, shall be included in the records required under
Sec. 19.747.
(Approved by the Office of Management and Budget under control number
1512-0198)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))
[T.D. ATF-206, 50 FR 23952, June 7, 1985]
Sec. 19.636 Bottles for testing purposes.
Proprietors may ship liquor bottles to persons for testing. The
disposition of such bottles, showing the name and address of the person
to whom the bottles are shipped, date of shipment, and the size and
number of bottles shipped, shall be included in the records required
under Sec. 19.747.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))
Sec. 19.637 Bottles not consitituting approved containers.
The Director shall disapprove for use as a liquor bottle any bottle,
including a bottle of less than 200 ml capacity, which he determines to
be deceptive. Any such bottle is not an approved container for the
purposes of Sec. 19.581 of this part, and shall not be used for
[[Page 352]]
packaging distilled spirits for domestic purposes.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))
Sec. 19.638 Disposition of stocks of liquor bottles.
When a proprietor discontinues operations, or permanently
discontinues the use of a particular size or type of liquor bottle, the
stocks of such bottles on hand shall either be disposed of to another
person authorized to receive liquor bottles, or destroyed, including
disposition for purposes which will render them unusable as bottles.
However, on approval of a written application by the regional director
(compliance) of the region in which the proprietor's plant is located,
liquor bottles may be otherwise disposed of.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))
Sec. 19.639 Use and resale of liquor bottles.
No proprietor shall use any liquor bottle except for packaging
distilled spirits, or dispose of any empty liquor bottle except to
another person authorized to receive liquor bottles or as provided in
Sec. 19.638. Bottles may be furnished to others for display and testing
purposes as provided in Secs. 19.635 and 19.636, respectively.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))
Bottle Label Requirements
Sec. 19.641 Certificate of label approval or exemption.
Proprietors are required by 27 CFR part 5 to obtain approval of
labels, or exemption from label approval, for any label to be used on
bottles of spirits for domestic use and shall exhibit evidence of label
approval, or of exemption from label approval, on request of an ATF
officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.642 Statements required on labels under an exemption
from label
approval.
All labels to be used on bottles of spirits for domestic use under
an exemption from label approval shall contain the applicable
information required in Secs. 19.643 through 19.650. Where a statement
of age or age and percentage is required, it shall have the meaning
given, and be stated in the manner provided in 27 CFR part 5.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.643 Brand name, kind, alcohol content, and State
of
distillation.
(a) Brand name and kind. The label of distilled spirits shall state
the brand name and kind, as set out in 27 CFR part 5.
(b) Alcohol content. (1) Mandatory statement. The label of distilled
spirits shall state the alcohol content in percent-alcohol-by-volume.
Products such as ``Rock and Rye'' or similar products containing a
significant amount of solid material shall state the alcohol content at
the time of bottling as follows: ``Bottled at ______ percent-alcohol-by-
volume.''
(2) Optional statement. In addition, the label may also state the
alcohol content in degrees of proof if this information appears in
direct conjunction (i.e. with no intervening material) with the
statement expressed in percent-alcohol-by-volume. If both forms of
alcohol content are shown, the optional statement in degrees of proof
shall be placed in parentheses, in brackets, or otherwise distinguished
from the mandatory statement in percent-alcohol-by-volume to emphasize
the fact that both expressions of alcohol content mean the same thing.
(c) State of distillation. (1) Mandatory statement. If a whisky
produced in the United States was not produced in the State shown on the
label, the label shall show the State of distillation, except as
provided by paragraph (c)(2) or (c)(3) of this section. The Director
may, however, require the State of distillation to be shown on the label
or permit such other. labeling as may be necessary to preclude any
misleading or deceptive impression which might otherwise be created as
to the actual State of distillation.
(2) Exceptions. The State of distillation is not required to be
shown on labels of ``blended whisky'', ``a blend of straight whiskies'',
``spirit whisky'',
[[Page 353]]
``light whisky'', or ``blended light whisky''. The State of distillation
may be prohibited on certain labels of ``light whisky'' or ``blended
light whisky'', in accordance with paragraph (c)(3) of this section.
(3) Prohibited statement. The State of distillation may not be
shown, except as part of the name and address required by 27 CFR
5.36(a), on labels of ``light whisky'' or ``blended light whisky''
produced in a State which the Director finds to be associated by
consumers with an American type whisky.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201)
Sec. 19.644 Net contents.
The net contents of liquor bottles shall be shown on the label,
unless the statement of the net contents is permanently marked on the
side, front, or back of the bottle.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as ameded (26 U.S.C. 5201))
Sec. 19.645 Name and address of bottler.
There shall be stated on the label of distilled spirits the phrase
``Bottled by'', ``packed by'', or ``Filled by'' immediately followed by
the name (or trade name) of the bottler and the place where such spirits
are bottled. If the bottler is the actual bona fide operator of more
than one distilled spirits plant engaged in bottling operations, there
may, in addition, be stated immediately following the name (or trade
name) of such bottler the addresses of such other plants. However:
(a) Where distilled spirits are bottled by or for the distiller
thereof, there may be stated, in lieu of the phrase ``Bottled by'',
``Packed by'', or ``Filled by'', followed by the bottler's name (or
trade name) and address, the phrase ``Distilled by'', followed by the
name (or trade name) under which the particular spirits were distilled,
or any trade name shown on the distiller's permit (covering the premises
where the particular spirits were distilled), and the address (or
addresses) of the distiller;
(b) Where ``straight whiskies'' of the same type which have been
produced in the same State by two or more different distillers are
combined (either at time of bottling or at a warehouseman's bonded
premises for further storage) and subsequently bottled and labeled as
``straight whisky,'' such ``straight whisky'' shall be labeled in
accordance with the requirements of the first paragraph of this section.
Where such ``straight whisky'' is bottled by or for the distillers
thereof, there may be stated on the label, in lieu of the requirements
of the first paragraph of this section, the phrase ``distilled by,''
followed by the names (or trade names) of the different distillers who
distilled a portion of the ``straight whisky,'' the addresses of the
distilleries where the ``straight whisky'' was distilled, and the
percentage of ``straight whisky'' distilled by each distiller (with a
tolerance of plus or minus 2 percent). In the case where ``straight
whisky'' is made up of a mixture of ``straight whiskies'' of the same
type from two or more different distilleries of the same proprietor
located within the same State, and where the ``straight whisky'' is
bottled by or for the proprietor thereof, such ``straight whisky'' may
be labeled, in lieu of the requirements of the first paragraph of this
section, with the phrase ``distilled by'' followed by the name (or trade
name) of the proprietor and the addresses of the different distilleries
which distilled a portion of the ``straight whisky.''
(c) Where distilled spirits are bottled by or for the proprietor of
a distilled spirits plant, there may be stated, in lieu of the phrase
``Bottled by'', ``Packed by'', or ``Filled by'', followed by the
bottler's name (or trade name) and address, the phrase ``Blended by'',
``Made by'', ``Prepared by'', ``Manufactured by'', or ``Produced by''
(whichever may be appropriate to the process involved), followed by the
name (or trade name) and the address (or addresses) of the distilled
spirits plant proprietor;
(d) On labels of distilled spirits bottled for a retailer or other
person who is not the actual distilled spirits plant proprietor of such
distilled spirits, there may also be stated the name and address of such
retailer or other person, immediately preceded by the words ``Bottled
for'', or ``Distributed by'', or other similar statement; and
[[Page 354]]
(e) The label may state the address of the proprietor's principal
place of business in lieu of the place where the bottling, distilling or
processing operation occurred, if the address where the operation
occurred is indicated by printing, coding, or other markings, on the
label or on the bottle. The coding system employed will permit an ATF
officer to determine where the operation stated on the label occurred.
Prior to using a coding system, the distilled spirits plant proprietor
shall send a notice explaining the coding system to the regional
director (compliance) of each region where a label code is used.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
[T.D.ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D.ATF-259, 52 FR
41423, Oct. 28, 1987; T.D. ATF-260, 52 FR 42101, Nov. 3, 1987]
Sec. 19.646 Age of whisky containing no neutral spirits.
In the case of whisky containing no neutral spirits, statements of
age and percentage shall be stated on the label as provided in 27 CFR
part 5.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.647 Age of whisky containing neutral spirits.
In the case of whisky containing neutral spirits, the age of the
whisky or whiskies and the respective percentage by volume of whisky or
whiskies and neutral spirits, shall be stated on the label as provided
in part 5 of this chapter.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.648 Age of brandy.
If brandy is aged for a period of less than two years, the age
thereof shall be shown on the label.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.649 Presence of neutral spirits and coloring, flavoring,
and
blending materials.
The presence of neutral spirits or coloring, flavoring, or blending
materials shall be stated on labels in the manner provided in 27 CFR
part 5.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.650 Country of origin.
On labels of imported distilled spirits there shall be stated the
country of origin in substantially the following form: ``Product of
________________,'' the blank to be filled in with the name of the
country or origin.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Subpart T--Closures
Source: T.D. ATF-206, 50 FR 23952, June 7, 1985.
Sec. 19.661 General.
Each bottle or other container of spirits having a capacity of one
gallon (3.785 liters) or less shall bear a closure or other device
affixed in accordance with Sec. 19.662. The closure or other device
shall be affixed to the container prior to withdrawal from bond or
customs custody.
(Approved by the Office of Management and Budget under control number
1512-0461)
(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))
Sec. 19.662 Affixing closures.
Closures or other devices on containers having a capacity of one
gallon (3.785 liters) or less shall be securely affixed to the
containers so as to leave a portion remaining on the container when the
container is opened. In addition, the closures or other devices shall be
constructed in such a manner as to require that they be broken to gain
access to the contents of the containers.
(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))
Sec. 19.663 Reclosing.
Bottles of distilled spirits filled on bonded premises may be
reclosed under the provisions of subpart M of this part. Bottles of
distilled spirits to which closures or other devices have
[[Page 355]]
been affixed may also be reclosed under the provisions of Sec. 19.611.
(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5215))
Subpart U--Return of Spirits to Bonded Premises and Voluntary
Destruction
Returns
Sec. 19.681 Return of taxpaid spirits to bonded premises.
(a) General. This section and Sec. 19.682 pertain only to taxpaid
spirits returned to bonded premises under 26 U.S.C. 5215(a). The return
of taxpaid bottled spirits to bonded premises solely for relabeling or
reclosing is covered in Sec. 19.393.
(b) Return. Distilled spirits on which the tax has been paid or
determined may only be returned to the bonded premises of a distilled
spirits plant under this section for:
(1) Destruction, in accordance with Sec. 19.691;
(2) Denaturation, in accordance with subpart N;
(3) Redistillation, in accordance with subpart K;
(4) Reconditioning; or
(5) Rebottling.
(c) Claims. Claims for credit or refund of tax on spirits returned
to bonded premises shall be filed as provided in, and accompanied by the
information prescribed by, Sec. 19.42.
(d) Applicability of 26 U.S.C. Chapter 51. All provisions of 26
U.S.C. Chapter 51 and this part, applicable to spirits in ATF bond,
shall be applicable to spirits when returned to bonded premises under
this section. The provisions of this subpart do not apply to taxpaid
bottled spirits returned to bond solely for relabeling or reclosing and
under the provisions of subpart M of this part.
(Sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50
FR 23952, June 7, 1985]
Sec. 19.682 Receipt and gauge of returned taxpaid spirits.
(a) Dump. Unless returned in the sealed metal drums in which they
were withdrawn, spirits returned to bonded premises shall be immediately
dumped.
(b) Gauge. Spirits returned under Sec. 19.681 shall be gauged upon
receipt on bonded premises. Such gauge may be established on the basis
of case markings and label information, as provided in Sec. 19.91.
(c) Supporting documents. (1) Proprietors must have on file at the
plant where spirits are returned to bond such documentation as is
necessary to establish the amount of tax for which a claim for credit or
refund may be allowed. Proprietors shall maintain credit memoranda or
comparable financial records evidencing the return of each lot of
spirits.
(2) If the spirits contain eligible wine or eligible flavors, the
proprietor shall also have on file a copy of the record of tax
determination prescribed by Sec. 19.761, or other documentation which
establishes the amount of tax for which a claim for credit or refund may
be allowed. In lieu of establishing the actual effective tax rate of a
product, the proprietor may claim refund or credit based on the lowest
effective tax rate applied to the product.
(Sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215); Sec. 807, Pub.
L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201, Pub. L. 85-859, 72
Stat. 1356, as amended (26 U.S.C. 5201); Sec. 6, Pub. L. 96-598, 94
Stat. 3488, as amended (26 U.S.C. 5010))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-297, 55
FR 18064, Apr. 30, 1990]
Sec. 19.683 Return of recovered denatured spirits and recovered
articles.
Recovered denatured spirits and recovered articles may be returned
for restoration or redenaturation to the bonded premises of any plant
authorized to denature spirits, in accordance with the provisions of 27
CFR part 20. If restoration requires redistillation, the recovered
denatured spirits or recovered articles may be returned for that purpose
to bonded premises of a plant
[[Page 356]]
authorized to produce or process spirits. Recovered denatured spirits or
recovered articles shall be gauged on receipt.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1363, as amended, 1372, as amended
(26 U.S.C. 5223, 5273))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50
FR 9162, Mar. 6, 1985]
Sec. 19.684 Articles and spirits residues received for
redistillation.
Articles manufactured under 27 CFR part 20, and spirits residues of
manufacturing processes related thereto, may be received on the bonded
premises of a distilled spirits plant authorized to produce or process
distilled spirits, for the recovery by redistillation of the distilled
spirits contained in those materials. The proprietor shall gauge the
materials when received.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended (26 U.S.C. 5223))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50
FR 9162, Mar. 6, 1985]
Sec. 19.685 Return of recovered tax-free spirits, and spirits
and
denatured spirits withdrawn free of tax.
(a) General. Specially denatured spirits withdrawn free of tax under
the applicable provisions of 27 CFR part 252 for exportation or for
deposit in a foreign-trade zone, and spirits or denatured spirits
withdrawn free of tax under the applicable provisions of 27 CFR part 20
or 22, may be returned: (1) To bonded premises of any distilled spirits
plant authorized to produce or process distilled spirits, for
redistillation; or (2) To any bonded premises of a distilled spirits
plant pending subsequent lawful withdrawal free of tax. Recovered tax-
free spirits may, as provided in 27 CFR part 22, be returned for
redistillation to bonded premises of any distilled spirits plant
authorized to produce or process distilled spirits or to any bonded
premises of a distilled spirits plant for restoration (not including
redistillation). The return shall be made under the applicable
provisions of this part and 27 CFR part 20, 22, or 252, as appropriate.
(b) Bonding requirements. Before spirits or denatured spirits are
returned to bonded premises, except spirits or denatured spirits
returned for redistillation, the proprietor shall file a consent of
surety on Form 1533 to extend the terms of the operations or unit bond
to cover the return of the spirits. The proprietor may file one consent
of surety on the bond to extend the terms thereof to cover all spirits
which may be returned.
(c) Procedure. When recovered tax-free spirits, spirits, or
denatured spirits are received, they shall be gauged. When containers of
spirits removed for export are returned to bond, pending subsequent
removal for a purpose other than export, the export marks shall be
obliterated.
(Sec. 3, Act of June 13, 1934, 48 Stat. 999, as amended (19 U.S.C. 81c);
Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1365, as amended
(26 U.S.C. 5001, 5223))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50
FR 9162, Mar. 6, 1985]
Sec. 19.686 Return of spirits withdrawn without payment
of tax.
(a) Spirits withdrawn for export. Spirits lawfully withdrawn without
payment of tax under the provisions of 27 CFR part 252 for exportation,
or for transfer to a customs bonded warehouse or a customs manufacturing
bonded warehouse, or for deposit in a foreign-trade zone, or for use on
vessels and aircraft, and not so exported, transferred, deposited, or
used (or laden for use) on a vessel or aircraft, may be returned, under
the applicable provisions of this part and 27 CFR part 252: (1) To the
bonded premises of any plant authorized to produce or process distilled
spirits, for redistillation; or (2) To the bonded premises from which
withdrawn pending subsequent removal for a lawful purpose.
(b) Spirits withdrawn for use in wine production. Wine spirits
withdrawn under Sec. 19.532 for use in wine production, and not so used,
may be returned to the bonded premises of a distilled spirits plant. The
consignee proprietor shall obtain approval, as provided in Sec. 19.506.
The wine spirits shall be removed from the winery in accordance with the
provisions of 27 CFR part 240.
(c) Spirits withdrawn for research, development, or testing. Spirits
withdrawn
[[Page 357]]
without payment of tax, under the provisions of subpart V of this part,
for research, development, or testing may be returned to the bonded
premises of the distilled spirits plant from which withdrawn. After
returning these spirits to bonded premises, they shall be destroyed,
returned to containers, or returned to vessels in the distilling system
containing similar spirits.
(d) Procedure. When spirits are received, they shall be gauged by
the proprietor. When spirits which were removed for exportation are
returned to bonded premises pending subsequent removal for a purpose
other than exportation, all export marks on the containers in which the
spirits are returned shall be obliterated.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1365, as amended,
1382, as amended (26 U.S.C. 5214, 5223, 5373); Sec. 3, Pub. L. 91-659,
84 Stat. 1965, as amended (26 U.S.C. 5066))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50
FR 23952, June 7, 1985]
Sec. 19.687 Return of spirits withdrawn for export with
benefit of
drawback.
Subject to the provisions of 27 CFR 252.197 through 252.199, whole
or partial shipments of spirits withdrawn for export with benefit of
drawback may be returned to: (a) The bonded premises of the distilled
spirits plant, pursuant to Sec. 19.681, or (b) to a wholesale liquor
dealer or taxpaid storeroom. Claims filed by proprietors on ATF Form
5110.30 which include the returned spirits shall be reduced by the
amount of tax paid or determined on the returned spirits.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended (26 U.S.C. 5062);
Sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))
Sec. 19.688 Abandoned spirits.
Spirits abandoned to the United States may be sold, without payment
of the tax, to a proprietor of a plant for denaturation or for
redistillation and denaturation, if the plant is authorized to denature
or redistill and denature spirits. These spirits shall be kept apart
from all other spirits or denatured spirits until denatured. The receipt
and gauging provisions of Sec. 19.683 are applicable to these spirits.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5243))
Voluntary Destruction
Sec. 19.691 Voluntary destruction.
(a) General. Spirits, denatured spirits, articles, or wines in bond
may be voluntarily destroyed as provided in this section. The tax
liability on spirits, denatured spirits, articles, or wines so destroyed
is extinguished.
(b) Wine notice. Wine may be destroyed in bond only after the
proprietor has filed notice with the regional director (compliance)
stating the kind and quantity of wine to be destroyed and the date and
manner in which the wine is to be destroyed. The wine may be destroyed
after such notice has been filed.
(c) Gauging. A proprietor shall gauge spirits, denatured spirits,
articles, or wines to be destroyed. Gauges of spirits in bottles may be
established on the basis of legible case markings and label information
when:
(1) The bottles are full;
(2) There is no evidence that the bottles have been tampered with.
(d) Off bonded premises. Spirits, denatured spirits, articles or
wines may be removed and destroyed at a location off bonded premises if
the proprietor has filed a consent of surety to cover such removal. If
the destruction is accomplished off plant premises, the proprietor shall
ensure compliance with applicable Federal, State, and local
environmental laws and regulations.
(e) Record of destruction. The proprietor shall record the
destruction of spirits, denatured spirits, articles, or wines as
provided in Sec. 19.767.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1381, as amended
(26 U.S.C. 5008, 5370))
Subpart V--Samples of Spirits
Sec. 19.701 Spirits withdrawn from bonded premises.
(a) Samples withdrawn from bonded premises. The proprietor may
withdraw spirits without payment of tax, or wine spirits or brandy free
of tax, to the proprietor's laboratory, the laboratory of
[[Page 358]]
an affiliated or subsidiary corporation, or, if approved by the regional
director (compliance), to a recognized commercial laboratory for testing
or analysis (other than consumer testing or other market analysis) to
determine the quality or character of the finished product. The quantity
of spirits so withdrawn shall not exceed the amount necessary for
conduct of the proprietor's operations.
(b) Customer samples. A quantity of spirits not exceeding 1 liter
may be furnished to a prospective purchaser for quality testing (other
than consumer testing or other market analysis) only if a bona fide
written or oral purchase agreement exists which is contingent upon
quality approval by the prospective purchaser; except that a sample not
to exceed 1 liter may be furnished to a prospective customer for quality
testing in anticipation of a purchase agreement if the customer is
authorized to receive bulk spirits for industrial use.
(c) Research or development. Spirits may be withdrawn without
payment of tax for research, development, or testing (other than
consumer testing or other market analysis) of processes, systems,
materials or equipment relating to distilled spirits or distilled
spirits plant operations. The amount withdrawn shall be limited to an
amount necessary for conduct of the testing, research or development. If
the testing, research or development is to be conducted by other than
the proprietor, the proprietor shall secure a written statement,
executed by the consignee, agreeing that he will maintain records of the
receipt, use, and disposition of all spirits received by him and that
those records and operations will be available during regular business
hours for inspection by ATF officers.
(d) Conditions. (1) Records will be maintained in accordance with
Sec. 19.766 of all spirits taken or withdrawn under the provisions of
this section.
(2) Remnants or residues of spirits withdrawn but not used during
testing, research or development shall be destroyed or returned to the
bonded premises for storage with similar products or entry in the
continuous distilling system.
(e) Limitation. The regional director (compliance) shall proceed to
collect the tax on any spirits withdrawn under this section which are
found to have been withdrawn, used or disposed of in a manner not
authorized by this section.
(f) Losses. When spirits are lost prior to being used for the
authorized purpose, the proprietor shall either pay the tax or file a
claim for remission of tax as prescribed by Sec. 19.41.
(Sec. 201, Pub. L. 86-859, 72 Stat. 1362, as amended, 1382, as amended
(26 U.S.C. 5214, 5173))
Sec. 19.702 Samples used on bonded premises.
The proprietor may take samples of spirits for research,
development, testing, or laboratory analysis conducted in a laboratory
located on the bonded premises of the distilled spirits plant. The
applicable purposes, conditions and limitations for samples taken
pursuant to Sec. 19.701 shall also apply to samples taken as authorized
by this section.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1382, as amended
(26 U.S.C. 5008))
Sec. 19.703 Taxpayment of samples.
When tax is required to be paid on samples:
(a) If the proprietor is qualified to defer payment of tax, the tax
shall be included in the proprietor's semimonthly tax return on Form
5000.24.
(b) If the proprietor is not qualified to defer the payment of tax,
the tax shall be paid on a prepayment tax return on Form 5000.24.
[T.D. ATF-219, 50 FR 51388, Dec. 17, 1985]
Sec. 19.704 Labels.
(a) On each container of spirits to be withdrawn under the
provisions of Sec. 19.701, the proprietor shall affix a label showing
the following information:
(1) Purpose for which withdrawn;
(2) Kind of spirits;
(3) Size and the proof of the sample, if known;
(4) If the spirits are removed to other then adjacent or contiguous
premises of the proprietor, the name and address of the consignee;
[[Page 359]]
(5) The proprietor's name, and plant number; and
(6) The date taken.
(b) The labeling required by paragraph (a) of this section is not
necessary when sample containers bear an approved label pursuant to 27
CFR Part 5 and subpart S of this part and the sample is removed from
bonded premises to the general premises of the same distilled spirits
plant.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1362, as amended,
1382, as amended (26 U.S.C. 5206, 5214, 5373))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50
FR 23952, June 7, 1985]
Subpart W--Records and Reports
General
Sec. 19.721 Records.
(a) In General. (1) The records to be maintained by proprietors
shall include:
(i) All individual transaction forms, records, and summaries
specifically required by this part;
(ii) All supplemental, auxiliary, and source data utilized in the
compilation of required forms, records, and summaries, and for
preparation of reports, returns, and claims; and
(iii) Copies of notices, reports, returns, and approved applications
and other documents relating to operations and transactions.
(2) The records required by this part may consist of the
proprietor's commercial documents, rather than records prepared
expressly to meet the requirements of this part, if such documents
contain all the details required by this part to be recorded, are
consistent with the general requirements of clarity and accuracy, and do
not result in difficulty in their examination.
(b) Accounts. The records required by this part to be maintained by
proprietors shall be arranged into three primary operational accounts:
(1) Production,
(2) Storage, and
(3) Processing.
Records shall indicate receipts, movements between accounts, transfers
in bond, or withdrawals of spirits, denatured spirits, articles, or
wines.
(c) Exceptions. The term ``records'' as used in this subpart does
not include copies of qualifying documents required under subpart G, or
of bonds required under Subpart H of this part.
(d) Special provisions. See 27 CFR 70.22 for information with
respect to ATF examination of financial records and books of account.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.722 Conversion between metric and U.S. units.
When liters are converted to wine gallons, the quantity in liters
shall be multiplied by 0.264172 to determine the equivalent quantity in
wine gallons. Cases containing the same quantity of spirits of the same
proof in metric bottles may be converted to U.S. units by multiplying
the liters in one case by the number of cases to be converted, as
follows: (a) If the conversion from liters to U.S. units is made before
multiplying by the number of cases, the quantity in U.S. units shall be
rounded to the sixth decimal; or (b) If the conversion is made after
multiplying by the number of cases, the quantity in U.S. units shall be
rounded to the nearest hundredth. Once converted to wine gallons, the
proof gallons of spirits in cases shall be determined as provided in 27
CFR 30.52.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.723 Maintenance and preservation of records.
(a) Place of maintenance. Records required by this part shall be
prepared and kept by the proprietor at the plant where the operation or
transaction occurs and shall be available for inspection by any ATF
officer during business hours.
(b) Reproduction of original records. (1) Whenever any record,
because of its condition, becomes unsuitable for its intended or
continued use, the proprietor shall reproduce such record, by a process
approved by the regional director (compliance) under Sec. 19.725 for
reproducing records, and such reproduction shall be treated and
considered for all purposes as though it were the original record.
[[Page 360]]
(2) All provisions of law applicable to the original record shall be
applicable to such reproductions.
(c) Retention of records. (1) Records required by this part shall be
preserved for a period of not less than three years from the date
thereof or the date of the last entry required to be made thereon,
whichever is later. However, the regional director (compliance) may
require records to be kept for an additional period not exceeding three
years in any case where such retention is deemed necessary or advisable
for the protection of the revenue.
(2) The period for retention of records prescribed in paragraph
(c)(1) of this section shall not apply to copies of outstanding approved
formulas or to copies of formulas which form the basis for claims for
credit or refund of taxes on spirits returned to bonded premises. A copy
of any such formula shall be kept by the proprietor at the plant where
spirits are processed subject to the formula or at the plant where such
spirits are received.
(d) Data processing. (1) Notwithstanding any other provision of this
section, record data maintained on data processing equipment may be kept
at a location other than the plant premises if the original transaction
(source) records required by Secs. 19.736-19.779 are kept available for
inspection at the plant premises.
(2) Data which has been accumulated on cards, tapes, discs, or other
accepted record media must be retrievable within five business days.
(3) The applicable data processing program shall be made available
for examination if requested by an ATF officer.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.724 Modified forms.
(a) Application. Proprietors desiring to modify prescribed forms
shall submit an application to the Director, through the regional
director (compliance). The application shall be accompanied by:
(1) A copy of each proposed form with typical entries; and
(2) A statement showing the need for use of the modified forms.
Modified forms shall not be used until approved by the Director.
(b) Restrictions. The use of modified forms shall not relieve a
proprietor from any requirement of this part. The Director may require a
proprietor to immediately discontinue the use of any modified form when
such use is found to pose administrative problems.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.725 Photographic copies of records.
(a) Application. Proprietors who desire to record, copy or reproduce
records, required by this part, by any process which accurately
reproduces or forms a durable medium for so reproducing the original of
such records, shall apply to the regional director (compliance) for
permission to do so, describing:
(1) The records to be reproduced,
(2) The reproduction process to be employed,
(3) The manner in which the reproductions are to be preserved, and
(4) The provisions to be made for examining, viewing, and using such
reproductions.
(b) Approval. The regional director (compliance) shall not approve
any application unless the manner of preservation of the reproductions
and the provisions for examining, viewing, and using such reproductions
are satisfactory.
(c) Conditions. Whenever records are reproduced under this section,
the reproduced records shall be preserved in conveniently accessible
files, and provisions shall be made for examining, viewing, and using
the reproduced record the same as if it were the original record, and it
shall be treated and considered for all purposes as though it were the
original record. All provisions of law and regulations applicable to the
original shall be applicable to the reproduced record. As used in this
section, ``original record'' shall mean the record required by this part
to be maintained or preserved by the proprietor, even though it may be
an executed duplicate or other copy of the document.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended, (26 U.S.C 5555))
[[Page 361]]
Sec. 19.726 Authorized abbreviations to identify spirits.
The following abbreviation may be used, either alone or in
conjunction with descriptive words, to identify the kind of spirits on
forms or records:
------------------------------------------------------------------------
Kinds of spirits Abbreviations
------------------------------------------------------------------------
Alcohol.................................... A
Brandy..................................... BR
Bourbon Whisky............................. BW
Canadian Whisky............................ CNW
Completely Denatured Alcohol............... CDA
Corn Whisky................................ CW
Grain Spirits.............................. GS
Irish Whisky............................... IW
Light Whisky............................... LW
Malt Whisky................................ MW
Neutral Spirits............................ NS
Neutral Spirits Grain...................... NSG
Rye Whisky................................. RW
Scotch Whisky.............................. SW
Specially Denatured Alcohol................ SDA
Special Denatured Rum...................... SDR
Tequila.................................... TEQ
Vodka...................................... V
Whisky..................................... W
------------------------------------------------------------------------
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
Records
Sec. 19.731 General.
(a) Entries. (1) Each entry required by this part to be made in
daily records shall be made on the day on which the operation or
transaction occurs.
(2) When the proprietor prepares supplemental or auxiliary records
concurrent with the individual operation or transaction, and these
records contain all the required information with respect to the
operation or transaction, entries in daily records may be deferred not
later than the close of business the third business day succeeding the
day on which the operation or transaction occurs.
(b) Content. (1) All entries in the daily records required by this
subpart shall show the date of the operation or transaction.
(2) Daily records shall accurately and clearly reflect the details
of each operation or transaction and, as applicable, contain all data
necessary to enable:
(i) Identification and proper marking and labeling of spirits,
denatured spirits, or wines;
(ii) Proprietors to prepare summaries, reports, and returns required
by this part; and
(iii) ATF officers to:
(A) Verify and trace the quantity and movement of materials,
spirits, denatured spirits, wines, or alcoholic flavoring materials
involved in each transaction or operation;
(B) Verify tax determinations and claims; and
(C) Ascertain whether there has been compliance with law and
regulations.
(c) Format. (1) Proprietor's copies of prescribed forms which bear
all required details shall be utilized as daily records.
(2) In instances when a form is not prescribed, the records required
by this subpart shall be those commercial records used by the proprietor
in his accounting system and shall bear all required details.
(3) Daily records required by this part shall be so maintained that
they clearly and accurately reflect all mandatory information. Where the
format or arrangement of the daily records is such that the information
is not clearly or accurately reflected, the regional director
(compliance) may require a format or arrangement which will clearly and
accurately reflect the information.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.732 Details of daily records.
The daily records required by this part shall conform to the
following requirements:
(a) Spirits shall be recorded by kind and by quantity in proof
gallons, except as provided in Sec. 19.751.
(b) Denatured spirits shall be recorded by formula number and by
quantity in wine gallons.
(c) Distilling materials produced on the premises shall be recorded
by kind and by quantity in wine gallons. Chemical byproducts containing
spirits, articles, spirits residues, and distilling materials received
on the premises shall be recorded by kind, by percent of alcohol by
volume, and by quantity in wine gallons. However, when nonliquid
distilling materials which are not susceptible to such quantitative
determination are received, the quantity of such
[[Page 362]]
materials may be determined by weight and shall be so recorded, and the
alcohol content need not be recorded. When it can be shown that it is
impractical to weigh or otherwise determine the exact quantity of such
nonliquid materials, the proprietor may estimate the weight or volume of
the material.
(d) Wines shall be recorded by kind, by quantity in wine gallons,
and by percent of alcohol by volume.
(e) Alcoholic flavoring materials shall be recorded by kind, formula
number (if any) and by quantity in proof gallons.
(f) Containers (other than those bearing lot identification numbers)
or cases involved in each operation or transaction shall be recorded by
type, serial number, and the number of containers (including identifying
marks on bulk conveyances), or cases. However, spirits withdrawn in
cases may be recorded without the serial numbers of the cases, unless
the regional director (compliance) requires such recording. Package
identification numbers, number of packages, and proof gallons per
package shall be recorded on deposit record in the storage account
reflecting production gauges or filling of packages from tanks, however,
only the lot identification, number of packages, and proof gallons per
package need be shown for transactions in packages of spirits unless
package identification numbers are specifically required by this part.
(g) Materials intended for use in the production of spirits shall be
recorded by kind and by quantity, recording liquids in gallons and other
materials in pounds, and giving the sugar content for molasses.
(h) The name and address of the consignee or consignor, and if any,
the plant number or industrial use permit number of such person, shall
be recorded for each receipt or removal of materials, spirits, denatured
spirits, articles, spirits residues, and wine.
(i) The serial number of the tank used shall be recorded for each
operation or transaction.
(j) The rate of duty paid on imported spirits shall be shown on the
transaction forms or records.
(k) Records shall identify imported spirits, spirits from Puerto
Rico, and spirits from the Virgin Islands, or the records shall show
that a distilled spirits product contains such spirits.
(l) Records shall identify spirits that are to be used exclusively
for fuel use.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Production Account
Sec. 19.736 Daily production records.
(a) Spirits production. Each proprietor shall maintain daily
production account records of production operations showing:
(1) The receipt of fermenting material or other nonalcoholic
material intended for use in the production of spirits.
(2) The receipt and use of spirits, denatured spirits, articles, and
spirits residues received for redistillation.
(3) The fermenting material set in each fermenter or other material
used in the production of spirits.
(4) The distilling material produced, received for production, and
used in production of spirits, or destroyed or removed from the premises
before being distilled (including the residue of beer returned to the
producing brewery).
(5) The gauge of spirits in each receiving tank, the production
gauge (in proof gallons) of spirits removed from each tank, and the
transaction form or record and its serial number covering each removal.
The details of individual packages filled pursuant to production gauge
for immediate withdrawal from bonded premises shall also be recorded.
(6) The fermenting materials or other nonalcoholic materials used or
removed from the premises.
(7) The quantity and testing for alcoholic content of fusel oil or
other chemicals removed from the production system and the disposition
thereof with the name of the consignee, if any.
(8) The kind and quantity of distillates removed from the production
system pursuant to Sec. 19.322.
(9) The kind and quantity of spirits, lost or destroyed prior to
production gauge. Records pertaining to the production account shall be
maintained in
[[Page 363]]
such a manner that the spirits produced may be traced through the
distilling system to the mash or other material from which produced, and
the identity of the spirits thus traced may be clearly established.
(b) Byproduct spirit production. Each proprietor who manufactures
substances other than spirits, in a process which produces spirits as a
byproduct, shall maintain daily production records as to each such
process showing:
(1) The kind and quantity of materials received, unless included in
records maintained under paragraph (a) of this section.
(2) The spirits produced and disposed of.
(3) The kind and quantity of other substances produced.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]
Storage Account
Sec. 19.740 Daily storage records.
(a) General. Proprietors shall maintain daily records in the storage
account which shall show for each kind of spirits or wine, as
applicable:
(1) Spirits or wines received for deposit in storage;
(2) Spirits mingled;
(3) Spirits in tanks;
(4) Spirits or wines filled into packages from tanks and retained
for storage;
(5) Spirits of less than 190 degrees of proof or wines transferred
from one tank to another;
(6) Spirits returned to bond;
(7) Spirits or wines voluntarily destroyed;
(8) Spirits or wines lost during storage;
(9) The transfer of spirits or wine from one package to another;
(10) The addition of oak chips to spirits and the addition of
caramel to brandy or rum; and
(11) The disposition of spirits or wines.
(b) Records covering deposits. The proprietor's copies of gauge
records, transfer records, or tank records of wines or spirits of less
than 190 degrees of proof covering: deposit in the storage account of
spirits received from the production account, from customs custody, or
by return to bond under subpart U of this part, or of wines or spirits
from other bonded premises; packages of spirits or wines filled from
tanks and retained in the storage account after mingling; and wines or
spirits of less than 190 degrees of proof transferred from one tank to
another, shall be utilized by the proprietor to record wines or spirits
deposited in the storage account. The proprietor shall enter the date of
deposit of the spirits in storage on the record. Files of deposit
records shall be maintained for spirits in packages and such files shall
be arranged by producers (by warehouseman in the case of blended rums or
brandies and for spirits of 190 degrees or more of proof, by the
warehouseman who received the spirits from customs custody in the case
of imported spirits, and by producer in the Virgin Islands or Puerto
Rico in the case of Virgin Islands or Puerto Rican spirits), in
chronological order according to the date of deposit in the storage
account, and, when possible, in sequence by lot identification for
packages. (For the purpose of records under this section spirits
produced under trade names shall be treated as being produced under the
real name of the proprietor [producer].) Also, files of deposit records
shall be maintained, in the manner prescribed by 19.742, for wines and
for spirits of less than 190 degress of proof in tanks in the storage
account with a separate file for each tank of wines or spirits. In the
case of spirits of 190 degrees or more of proof deposited in tanks in
the storage account, the proprietor shall maintain a separate
consolidated file of deposit records for all tanks, separately as to
gin, vodka, and other spirits as applicable, of all such domestic
spirits; all such imported spirits duty paid at the beverage rate; all
such imported spirits duty paid at the nonbeverage rate; all such Virgin
Islands spirits; and all such Puerto Rican spirits. Such files shall be
arranged chronologically by date of deposit in the warehouse.
(c) Records covering withdrawals. When wines or spirits other than
spirits of 190 degrees or more of proof in
[[Page 364]]
tanks in the storage account, are withdrawn from the storage account the
proprietor shall note on the record of deposit, the date and disposition
of the spirits so that the files shall currently reflect the spirits
remaining in the storage account. When spirits of 190 degrees or more of
proof are withdrawn from tanks in the storage account the record of
deposit need not be noted, but semi-annually (as of June 30 and December
31) the proprietor shall remove from his consolidated files of active
deposit records all such records in excess of those required to cover
the quantity of spirits shown as remaining in tanks. The deposit records
so removed shall be those covering spirits first deposited in the
storage account.
(Sec. 807, Pub. L. 96-39 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.741 Package summary records.
(a) General. Each warehouseman shall keep current summary records
for each kind of spirits or wines in packages, to show the spirits or
wines deposited in, withdrawn from, and remaining in the storage
account. Separate accounting records shall be kept for domestic spirits,
imported spirits, Virgin Islands spirits, Puerto Rican spirits, and
wine. Package accounts for spirits may be kept by either the season or
the year the packages were filled with spirits.
(b) Arrangement. Package summary records shall be prepared and
arranged separately:
(1) For domestic spirits of less than 190 degrees of proof,
alphabetically by State and numerically by the plant number and name of
the producer or warehouseman.
(2) For domestic spirits of 190 degrees or more of proof,
alphabetically by State, and numerically by the plant number and name of
the warehouseman.
(3) For imported spirits, alphabetically by State and numerically by
the plant number and name of the warehouseman who received the spirits
from customs custody.
(4) For Puerto Rican or Virgin Islands spirits, alphabetically by
the name of the producer in Puerto Rico or the Virgin Islands.
(5) For wine, by kind and tax rate imposed by 26 U.S.C. 5041.
(c) Details. Package summary records shall show the following
details:
(1) The date the summarized transactions occurred;
(2) For spirits, the number of packages and the proof gallons
contained therein;
(3) For wine, the number of packages and the wine gallons contained
therein;
(4) Gains or shortages disclosed by inventory or when an account is
closed; and
(5) Gallon balances on summary records for spirits and wines
remaining in the account at the end of each month.
(d) Summarization. Package summary records shall be consolidated at
the end of each month, or for lesser periods when required by the
regional director (compliance), to show for all types of containers and
kinds of spirits, the total proof gallons received in, withdrawn from,
and remaining in the storage account.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.742 Tank record of wine or spirits of less than
190 degrees of
proof.
(a) General. Proprietors shall keep a record for each tank
(including bulk conveyance) containing wine or spirits of less than 190
degrees of proof to show deposits into, withdrawals from, and the
balance remaining in each tank in the storage account. A new record
shall be prepared each time wine or spirits are deposited in an empty
tank. Except as otherwise provided in this section, each transaction
shall be recorded on the day the transaction occurs.
(b) Arrangement. Tank records shall be prepared and arranged:
(1) For domestic spirits, alphabetically by State, and numerically
by (i) the plant number and name of the producer, or, (ii) for blended
rums or brandies, the plant number and name of the warehouseman;
(2) For imported spirits, alphabetically by State, and numerically
by the plant number and name of the warehouseman;
(3) For Puerto Rican or Virgin Islands spirits, alphabetically by
the name of the producer in Puerto Rico or the Virgin Islands; and
[[Page 365]]
(4) For wine, by kind and tax rate imposed by 26 U.S.C. 5041.
(c) Details. Tank records shall show the following details:
(1) Tank record serial number, beginning with ``1'' for each record
initiated on or after January 1;
(2) Date of each transaction;
(3) Identification of the tank;
(4) Kind of wine or spirits;
(5) Number and average proof gallon content of packages of spirits
dumped in the tank, or a notation indicating the deposit in the tank of
spirits by pipeline;
(6) Wine gallons of wine, or proof gallons of spirits deposited;
(7) If subject to age, the age of the youngest spirits in years,
months and days, each time spirits are deposited;
(8) Wine gallons of wine, or proof gallons of spirits withdrawn;
(9) Related transaction form or record and its serial number for
deposits or withdrawals;
(10) Wine gallons of wine, or proof gallons of spirits remaining in
the tank, recorded at the end of each calendar month; and
(11) Gain or loss disclosed by inventory or on emptying of the tank.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.743 Tank summary record for spirits of 190 degrees
or more of
proof.
(a) General. Proprietors shall keep a tank summary record for
spirits of 190 degrees or more of proof held in tanks to show the proof
gallons deposited into, withdrawn from, and remaining in tanks in the
storage account. A separate tank summary record shall be prepared for
each kind of spirits of 190 degrees or more of proof. Entries shall be
made for each day in which a transaction occurs, and shall be recorded
as a summary of the individual transactions shown on the deposit
records.
(b) Arrangement. Tank summary records shall be prepared and
arranged:
(1) For domestic spirits, alphabetically by State, and numerically
by the plant number and name of the warehouseman;
(2) For imported spirits, alphabetically by State, and numerically
by the plant number of the warehouseman who received the spirits from
customs custody; and
(3) For spirits from Puerto Rico or the Virgin Islands,
alphabetically by the name of the producer in Puerto Rico or the Virgin
Islands.
(c) Details. Tank summary records shall show the following details:
(1) Kind of spirits;
(2) Date of transactions summarized;
(3) Proof gallons deposited;
(4) Proof gallons withdrawn;
(5) Proof gallons remaining in tanks; and
(6) Gain or loss disclosed by inventory or on emptying of the tanks
summarized on the record.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Processing Account
Sec. 19.746 Processing.
Each processor shall maintain daily records of transactions and
operations with respect to:
(a) Manufacture of distilled spirits products;
(b) Finished products;
(c) Denaturation of spirits; and
(d) Manufacture of articles.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.747 Records of manufacturing.
Each processor shall maintain daily records of the details of
manufacturing operations, showing:
(a) The spirits, wines, and alcoholic flavoring materials received.
The total receipts shall be summarized showing (1) the spirits received
from storage or production at the same plant, (2) the spirits received
from other plants by transfer in bond, (3) spirits received from customs
custody, (4) wines received from the storage account at the same plant,
(5) wines received by transfer in bond, and (6) alcoholic flavoring
materials received.
(b) The spirits, wines, alcoholic flavoring materials, and other
ingredients used in the manufacture of a distilled spirits products
showing the serial number of the dump/batch record covering such dump.
(c) Bottling or packaging of each batch of spirits, showing the
serial numbers of the bottling and packaging
[[Page 366]]
records covering such bottling or packaging.
(d) The results of bottling proof and fill tests as required by
Sec. 19.386.
(e) Receipt, use and disposition of liquor bottles.
(f) The rebottling, relabeling, and reclosing of bottled products as
required by Secs. 19.392 and 19.393.
(g) The spirits, wines, and alcoholic flavoring materials removed
from the premises.
(h) The spirits moved to the production account for redistillation.
(i) Redistillation of spirits, including the production of gin and
vodka by means other than original and continuous distillation.
(j) Record of alcoholic flavoring materials deposited into tanks
prior to dumping showing the consignor, the date and quantity received,
the name of the product, the date and quantity of each removal from the
tank and losses.
(k) Spirits returned to bond.
(l) The voluntary destruction of spirits and wines.
(m) The losses as provided in subpart Q of this part.
The records required by paragraph (a) of this section shall also show
the name and plant number of the producer or processor (warehouseman in
the case of blended beverage rums or brandies or spirits of 190 degrees
of more of proof received from storage) for domestic spirits, the name
of the importer and the country of origin for imported spirits, and the
name and address of the producer of wines and alcoholic flavoring
materials.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50
FR 23953, June 7, 1985]
Sec. 19.748 Dump/batch records.
(a) Format of dump/batch records. Proprietor's dump/batch records
shall contain, as applicable, the following:
(1) Serial number;
(2) Name and distilled spirits plant number of the producer;
(3) Kind and age of spirits used with a notation to indicate
treatment with oak chips, addition of caramel, imported spirits, and
spirits from Puerto Rico and the Virgin Islands;
(4) Serial number of tank or container to which ingredients are
added for use;
(5) Serial or identification number of tank or container from which
spirits are removed;
(6) Quantity by ingredient of other alcoholic ingredients used,
showing wine in wine gallons, percentage of alcohol by volume and proof,
and alcoholic flavoring materials in proof gallons;
(7) Serial number of source transaction record (e.g., record
covering spirits previously dumped);
(8) Date of each transaction;
(9) Quantity, by ingredient (other than water), of nonalcoholic
ingredients used;
(10) Formula number;
(11) Quantity of ingredients used in the batch that have been
previously dumped, reported on dump records, and held in tanks or
containers;
(12) Total quantity in proof gallons of all alcoholic ingredients
used;
(13) Identification of each record to which spirits are transferred;
(14) Quantity in each lot transferred;
(15) Date of each transfer;
(16) Total quantity in proof gallons of product transferred;
(17) Gain or loss; and
(18) For each batch to be tax determined in accordance with
Sec. 19.35, the effective tax rate.
(b) Redistillation. (1) Dump/batch records shall be prepared to show
spirits to be redistilled in the processing account, including the
production of gin or vodka by redistillation. A dump record shall also
be prepared to record the finished distillate.
(2) When redistillation requires the use of more than one tank or
other vessel in a continuous distilling system, the system may be shown
on the record in lieu of preparing a separate record to show each
movement of spirits between tanks or vessels.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-297, 55
FR 18064, Apr. 30, 1990]
[[Page 367]]
Sec. 19.749 Bottling and packaging record.
The bottling and packaging record shall be prepared and contain the
following information:
(a) Tank number(s);
(b) Serial number (beginning with ``1'' at the start of each
calendar or fiscal year);
(c) Formula number (if any) under which the batch was produced;
(d) Serial number of the dump/batch record from which received;
(e) Kind of product (including age, if claimed);
(f) Details of the tank gauge (including proof, wine gallons, proof
gallons, and, if applicable, obscuration);
(g) The date the bottles or packages were filled;
(h) Size of the bottles or packages filled, number of bottles per
case, and number of cases or packages filled;
(i) Serial numbers by brand name of cases or other containers
filled;
(j) Proof of the spirits bottled or packaged (if different from
subsection (f));
(k) Total quantity bottled, packaged or otherwise disposed of in
bulk;
(l) Losses or gains; and
(m) Whether the spirits were labeled as bottled in bond.
(Sec. 807(a), Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.750 Records of alcohol content and fill tests.
(a) Proprietors shall record the results of all tests of alcohol
content and quantity (fill) conducted.
(b) The record shall be maintained in a manner and provide
information that will enable ATF officers to determine whether the
proprietor has complied with the provisions of Sec. 19.386 by:
(1) Monitoring operations by conducting alcohol content and fill
tests; and
(2) Employing procedures to correct variations in alcohol content
and fill.
(c) Alcohol content and fill test records shall contain, at a
minimum, the following information:
(1) Date and time of test;
(2) Bottling tank number;
(3) Serial number of bottling record;
(4) Bottling line designation;
(5) Size of bottle;
(6) Number of bottles tested;
(7) Labeled alcohol content;
(8) Alcohol content found by the test;
(9) Percentage of variation from 100 percent fill; and
(10) Corrective action taken, if any.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5555);
Sec. 807(a), Pub. L. 96-39 (26 U.S.C. 5207)
[T.D. ATF-237, 51 FR 36395, Oct. 10, 1986; 51 FR 37271, Oct. 21, 1986]
Sec. 19.751 Records of finished products.
Each processor shall maintain by proof gallons daily transaction
records and a daily summary record of spirits bottled or packaged as
follows:
(a) Beginning and ending quantity of bottled or packaged spirits on
hand;
(b) Spirits bottled or packaged;
(c) Bottled or packaged spirits disposed of by:
(1) Withdrawal on tax determination;
(2) Transfer in bond;
(3) Withdrawal free of tax or without payment of tax;
(4) Dumping for further processing;
(5) Transfer to the production account for redistillation;
(6) Voluntary destruction;
(7) Accountable losses;
(8) Samples;
(9) Inventory shortages and overages; and
(10) Other dispositions.
In lieu of showing the proof gallons of spirits on daily transaction
records of withdrawals from bonded premises, proprietors may show the
wine gallons or liters and the proof of spirits in cases. Summary
records shall be used to compile the report required by Sec. 19.792.
(Sec. 807, Pub. L. 96-39, 93 Stat. 283, as amended (26 U.S.C. 5207))
Sec. 19.752 Denaturation records.
(a) General. Each processor qualified to denature spirits shall
maintain daily records of denaturation showing:
(1) Spirits received for, and used in, denaturation;
(2) Spirits, denatured spirits, recovered denatured spirits, spirits
residues, and articles redistilled in the processing account for
denaturation;
[[Page 368]]
(3) Kind and quantity of denaturants received, used in denaturation
of spirits, or otherwise disposed of;
(4) Conversion of denatured alcohol formulas in accordance with
Sec. 19.460;
(5) Denatured spirits produced, received, stored in tanks, filled
into containers, removed, or otherwise disposed of;
(6) Recovered denatured spirits or recovered articles received,
restored, and/or redenatured;
(7) Packages of denatured spirits filled with a separate record for
each formula number and filed in numerical order according to the serial
number or lot identification number of the packages;
(8) Losses; and
(9) Disposition of denatured spirits.
(b) Record of denaturation. Each time spirits are denatured, a
record shall be prepared to show the formula number, the tank in which
denaturation takes place, the proof gallons of spirits before
denaturation, the quantity of each denaturant used (in gallons, or in
pounds or ounces), and wine gallons of denatured spirits produced.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.753 Record of article manufacture.
Each processor qualified to manufacture articles shall maintain
daily records arranged by the name and authorized use code of the
article to show the following:
(a) Quantity, by formula number of denatured spirits used in the
manufacture of the article;
(b) Quantity of each article manufactured; and
(c) Quantity of each article removed, or otherwise disposed of,
including the name and address of the person to whom sold or otherwise
disposed of.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Tax Records
Source: Sections 19.761 through 19.765 added by T.D. ATF-297, 55 FR
18064, Apr. 30, 1990, unless otherwise noted.
Sec. 19.761 Record of tax determination.
A serially numbered invoice or shipping document, signed or
initialed by an agent or employee of the proprietor, will constitute the
record of tax determination. Although neither the proof gallons nor
effective tax rates need be shown on the record of tax determination,
there shall be shown on each invoice or shipping document sufficient
information to enable ATF officers to determine the total proof gallons
and, if applicable, each effective tax rate and the proof gallons
removed at each effective tax rate. For purposes of this part, the total
proof gallons calculated from each invoice or shipping document
constitutes a single withdrawal.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.762 Daily summary record of tax determinations.
Each proprietor of a distilled spirits plant who withdraws distilled
spirits on determination of tax, but before payment of tax, shall
maintain a daily summary record of tax determinations. The summary
record will show, for each day on which tax determinations occur:
(a) The serial numbers of the records of tax determination, the
total proof gallons, rounded to the nearest tenth proof gallon on which
tax was determined at each effective tax rate, and the total tax; or
(b) The serial numbers of the records of tax determination, the
total tax for each record of tax determination and the total tax.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.763 Record of average effective tax rates.
(a) For each distilled spirits product to be tax determined in
accordance with Sec. 19.37, the proprietor shall prepare a daily summary
record showing the--
(1) Serial number of the batch record of each batch of the product
which will be bottled or packaged, in whole or in part, for domestic
consumption;
(2) Proof gallons in each such batch derived from distilled spirits,
eligible wine, and eligible flavors; and
(3) Tax liabilities of each such batch determined as follows:
[[Page 369]]
(i) Proof gallons of all distilled spirits (exclusive of distilled
spirits derived from eligible flavors), multiplied by the tax rate
prescribed in 26 U.S.C. 5001;
(ii) Wine gallons of each eligible wine, multiplied by the tax rate
which would be imposed on the wine under 26 U.S.C. 5041(b)(1), (2), or
(3) but for its removal to bonded premises; and
(iii) Proof gallons of all distilled spirits derived from eligible
flavors to the extent that such distilled spirits exceed 2\1/2\% of the
proof gallons in the product, multiplied by the tax rate prescribed in
26 U.S.C. 5001.
(b) At the end of each month during which the product is
manufactured, the proprietor shall determine the--
(1) Total proof gallons and total tax liabilities for each summary
record prescribed by paragraph (a) of this section;
(2) Add the sums from paragraph (b)(1) of this section to the like
sums determined for each of the preceding five months; and
(3) Divide the total tax liabilities by the total proof gallons.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.764 Inventory reserve records.
(a) General. The proprietor shall establish an inventory reserve
account, as provided in this section, for each eligible distilled
spirits product to be tax determined in accordance with Sec. 19.38.
(b) Deposit records. For each batch of the product bottled or
packaged, the proprietor shall enter into the inventory reserve account
a deposit record, which may be combined with the bottling and packaging
record required by Sec. 19.749 showing the:
(1) Name of the product;
(2) Bottling and packaging record serial number;
(3) Date the bottling or packaging was completed;
(4) Total proof gallons bottled and packaged; and
(5) Effective tax rate of the product computed in accordance with
Sec. 19.34.
(c) Depletions. The inventory reserve account for each product will
be depleted in the same order in which the deposit records were entered
into such account. A depletion will be recorded for each disposition
(e.g., a taxable removal, an exportation, an inventory shortage or
breakage) by entering on the deposit record the:
(1) Transaction date,
(2) Transaction record serial number,
(3) Proof gallons disposed of, and
(4) Proof gallons remaining. If any depletion exceeds the quantity
of product remaining on the deposit record, the remaining quantity will
be depleted, the deposit record closed, and the remainder of the
transaction depleted from the next deposit record.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.765 Standard effective tax rates.
For each product to be tax determined using a standard effective tax
rate in accordance with Sec. 19.36, the proprietor shall prepare a
record of the standard effective tax rate computation showing, for one
proof gallon of the finished product, the following information:
(a) The name of the product;
(b) The least quantity of each eligible flavor which will be used in
the product, in proof gallons, or 0.025 proof gallon, whichever is less;
(c) The least quantity of each eligible wine which will be used in
the product, in proof gallons;
(d) The greatest effective tax rate applicable to the product,
calculated in accordance with Sec. 19.34 with the values indicated in
paragraphs (a) and (b) of this section; and
(e) The date on which the use of the standard effective tax rate
commenced.
Other Records
Sec. 19.766 Record of samples.
(a) Requirement. The proprietor shall maintain records of all
samples taken pursuant to subpart V of this part.
(b) Schedule. (1) When the proprietor takes samples pursuant to an
established schedule, such schedule may be maintained as the required
record if it contains that information required by paragraphs (c)(2)
through (c)(8).
(2) When unanticipated samples are taken, the schedule shall be
appropriately supplemented.
(c) Detail. Sample records shall show:
(1) Date samples were taken;
[[Page 370]]
(2) Type and identification of container from which taken;
(3) Account from which taken;
(4) Purpose for which taken;
(5) Size and number of samples taken;
(6) Kind of spirits;
(7) Disposition of the sample (e.g., destroyed, returned to
containers or the distilling system, retained for library purposes); and
(8) Name and address of the person to whom samples were sent when
the samples are to be analyzed or tested elsewhere than at the plant
where secured.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.767 Record of destruction.
The proprietor shall record details of the voluntary destruction of
spirits, denatured spirits, articles, or wines as follows:
(a) Identification of the spirits, denatured spirits, articles, or
wines to include, as applicable, kind, quantity, elements of gauge, name
and permit number of the producer, warehouseman or processor, and
identification and type of container.
(b) The date, time, place and manner of the destruction;
(c) A statement of whether or not the spirits had previously been
withdrawn and returned to bond; and
(d) The name and title of the proprietor's representative who
accomplished or supervised the destruction.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.768 Gauge record.
When gauges are required to be made by this part or by the regional
director (compliance), the proprietor shall prepare a gauge record to
show:
(a) Serial number, commencing with ``1'' at the start of each
calendar or fiscal year;
(b) Reason for making the gauge:
(1) Production gauge and entry for deposit in the storage or
processing account at the plant where produced;
(2) Packaging of spirits or wine filled from a tank in the storage
account at the same plant;
(3) Transfer from the processing or storage account to the
production account for redistillation;
(4) Repackaging of spirits of 190 degrees or more of proof; or
(5) Gauge on return to bond in the production or processing account
of spirits, denatured spirits, recovered spirits, recovered denatured
spirits, articles, recovered articles, or spirits residues.
(c) Date of gauge;
(d) Related form or record (identification, serial number and date);
(e) Kind of spirits or formula number of denatured spirits;
(f) Proof of distillation (not required for denatured spirits,
spirits for redistillation, or spirits of 190 degrees or more of proof);
(g) When containers are to be filled, the type and number of
containers;
(h) Age of spirits;
(i) Name and plant number of the producer or warehouseman; and
(j) Gauge data:
(1) Package identification, tank number, volumetric or weight gauge
details, proof, and wine gallons;
(2) Cooperage identification (``C'' for charred, ``REC'' for
recharred, ``P'' for plain, ``PAR''for paraffined, ``G'' for glued, or
``R'' for reused);
(3) Entry proof for whiskey;
(4) Proof gallons per filled package; and
(5) Total proof gallons of spirits or wine gallons of denatured
spirits, recovered denatured spirits, articles, spirits residues, or
wine.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.769 Package gauge record.
When required by this part and Part 252, a record shall be prepared
to document the gauge of packages of spirits and to convey information
on package gauges. The following information shall be recorded:
(a) Date prepared;
(b) Identification of the related transaction form or record, and
its serial number;
(c) The name and plant number of the producer or processor (For
blended rums or brandies enter name(s) and plant number of blending
warehouseman. For spirits of 190 degrees or more of proof, name and
plant number of the
[[Page 371]]
producer or warehouseman, as appropriate; where the packages have
already been marked, the name and plant number marked thereon. For
imported spirits, the name of the warehouseman who received the spirits
from customs custody and name of importer. For Virgin Islands or Puerto
Rican spirits, the name of the producer in the Virgin Islands or Puerto
Rico);
(d) proof of distillation for spirits not over 190 degrees proof;
and
(e) For each package--
(1) Serial or identification number;
(2) Designate wooden barrels as ``C'' for charred, ``REC'' for
recharred, ``P'' for plain, ``PAR'' for paraffined, ``G'' for glued,
``R'' for reused, and ``PS'' if a barrel has been steamed or water
soaked before filling;
(3) Kind of spirits;
(4) Gross weight determined at the time of original gauge, regauge,
or at time of shipment;
(5) Present tare on regauge;
(6) Net weight for filling gauge or regauge;
(7) Proof;
(8) Proof gallons for regauge;
(9) Original proof gallons; and
(10) Receiving weights, when a material difference appears on
receipt after transfer in bond of weighed packages.
(Approved by the Office of Management and Budget under control number
1512-0250)
(Sec. 807, Pub. L. 93-39, 93 Stat. 284 (26 U.S.C. 5207))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50
FR 23953, June 7, 1985]
Sec. 19.770 Transfer record.
(a) Consignor. When required by this part, proprietors shall prepare
a transfer record. The transfer record shall show: (1) Serial number,
commencing with ``1'' on January 1 of each year;
(2) Serial number and date of ATF Form 5100.16 (not required for
wine spirits withdrawn without payment of tax for use in wine
production);
(3) Name and distilled spirits plant number of consignor;
(4) Name and distilled spirits plant number or bonded wine cellar
number of the consignee;
(5) Account from which the spirits or wines were removed for
transfer (i.e., production, storage, or processing account);
(6) Description of the spirits, denatured spirits, or wine--
(i) Name and plant number of the producer, warehouseman or processor
(Not required for denatured spirits or wine. For imported spirits,
record the name and plant number of the warehouseman or processor who
received the spirits from customs custody. For transfer of imported
spirits from customs custody to ATF bond, record the name of the foreign
producer. For Virgin Islands or Puerto Rican spirits, show the name of
the producer in the Virgin Islands or Puerto Rico. For spirits of
different producers or warehousemen which have been mixed in the
processing account, record the name of the processor.);
(ii) Kind of spirits or wines (For denatured spirits, show kind and
formula number. For alcohol, show material from which produced. For bulk
spirits and for alcohol in packages, show kind and proof. For other
spirits and wines, use kind designation as defined in 27 CFR Part 4 or 5
as appropriate);
(iii) Age (in years, months, and days) and year of production;
(iv) Number of packages or cases with their lot identification
numbers or serial numbers and date of fill;
(v) Type of container (If spirits, denatured spirits or wines are to
be transferred by pipeline, show ``P/L''.);
(vi) Proof gallons for distilled spirits, or wine gallons for
denatured spirits or wine;
(vii) Conveyance identification; and
(viii) For distilled spirits products which contain eligible wine or
eligible flavors, the elements necessary to compute the effective tax
rate as follows:
(A) Proof gallons of distilled spirits (exclusive of distilled
spirits derived from eligible flavors);
(B) Wine gallons of each eligible wine and the percentage of alcohol
by volume of each; and
(C) Proof gallons of distilled spirits derived from eligible
flavors.
(7) Notation to indicate when spirits are being transferred in bond
from production facility to another plant;
(8) Identification of seals, locks or other devices affixed to the
conveyance or package (Permanent seals affixed to
[[Page 372]]
a conveyance and which remain intact need not be recorded on the
transfer record when a permanent record is maintained);
(9) Date; and
(10) Signature and title of the consignor with the penalties of
perjury statement required by Sec. 19.100.
(b) Consignee. (1) When a proprietor receives wine from a bonded
wine cellar, the consignee shall complete Form 703 covering such
transfer in accordance with the instructions thereon.
(2) When a proprietor receives spirits from an alcohol fuel plant or
from customs custody, or spirits, denatured spirits and wines from the
bonded premises of another distilled spirits plant, he shall record the
results of such receipt on the related transfer record as follows:
(i) Date of receipt;
(ii) Notation whether the securing devices on the conveyance were or
were not intact on arrival (not applicable to spirits transferred in
unsecured conveyances or denatured spirits);
(iii) Gauge of spirits, denatured spirits, or wine showing the tank
number, proof (percent of alcohol by volume for wine) and elements of
the weight or volumetric determination of quantity, wine gallons or
proof gallons received, and any losses or gains;
(iv) Notation of excessive in-transit loss, missing packages,
tampering, or apparent theft;
(v) Account into which the spirits, denatured spirits or wines were
deposited (i.e., production, storage or processing); and
(vi) Signature and title of the consignee with the penalties of
perjury statement required by Sec. 19.100.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-297, 55
FR 18065, Apr. 30, 1990; 55 FR 23635, June 11, 1990]
Sec. 19.771--19.772 [Reserved]
Sec. 19.773 Daily record of wholesale liquor dealer and
taxpaid
storeroom operations.
Where the proprietor, in connection with his plant, conducts
wholesale liquor dealer operations, or operates a taxpaid storeroom, on,
contiguous to, adjacent to, or in the immediate vicinity of general
plant premises, or operates taxpaid storage premises at another location
from which distilled spirits are not sold at wholesale, he shall
maintain daily records of the receipt and disposition of all distilled
spirits and wines at such premises, and of all reclosing and relabeling
operations. The provisions of this section shall also apply to products
returned to a wholesale liquor dealer or taxpaid storeroom from the
market. A separate record shall be kept for each such premises. The
records in respect of the receipt and disposition of distilled spirits
and wines shall contain all data necessary (consisting of or supported
by records including bills of lading and invoices) to enable ATF
officers to identify and trace such receipt and dispositions and to
ascertain whether there has been compliance with all laws and
regulations relating thereto. In addition to any other information shown
therein, such records shall include:
(a) For receipts and dispositions--
(1) The date of the transaction (or date of discovery in the case of
casualty or theft);
(2) The name and address of each consignor or consignee, as the case
may be;
(3) The brand name;
(4) The kind of spirits;
(5) The actual quantity of distilled spirits involved (proof and
proof gallons if in packages, wine gallons or liters and proof if in
bottles);
(6) The package identification or serial numbers of packages
involved;
(7) The name of the producer; and
(8) The country of origin, if imported spirits.
(b) For case dispositions--In addition to the requirements listed in
paragraph (a) of this section the regional director (compliance) may,
upon notice to the dealer, require the recording of case serial numbers
for dispositions.
(c) For reclosing or relabeling operations--
(1) The date of the transaction;
(2) The serial numbers of cases involved;
(3) The total number of bottles;
(4) The name of the bottler; and
[[Page 373]]
(5) The number and kind of strip stamps used and/or the number of
alternative devices used.
(Approved by the Office of Management and Budget under control number
1512-0198)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5555))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50
FR 23953, June 7, 1985]
Sec. 19.774 Record of inventories.
(a) General. Each proprietor shall make a record of inventories of
spirits, denatured spirits, and wines required by Secs. 19.329, 19.353,
19.401, 19.402, and 19.464. The following information shall be shown:
(1) Date taken;
(2) Identification of container(s);
(3) Kind and quantity of spirits, denatured spirits, and wines;
(4) Losses (whether by theft, voluntary destruction or otherwise),
gains or shortages; and
(5) Signature, under penalties of perjury, of the proprietor or
person taking the inventory.
(b) Production. Each proprietor shall record the quarterly inventory
of spirits as provided in paragraph (a) of this section.
(c) Storage. (1) Each proprietor shall record the quarterly
inventory of spirits and wines (except those in packages) as provided in
paragraph (a) of this section.
(2) Gains or losses disclosed for each container shall be recorded
on the current tank record (or summary record for spirits of 190 degrees
or more of proof).
(d) Processing. Each proprietor shall record inventories as provided
in paragraph (a) of this section, and for:
(1) Bulk spirits and wines in process, any gains or losses shall be
recorded on the individual dump, batch, or bottling record;
(2) Finished products in bottles and packages, any overages, losses,
and shortages for the total quantity inventoried shall be recorded in
records required by Sec. 19.751; and
(3) Denatured spirits, any gains or losses shall be recorded in the
record prescribed by Sec. 19.752.
(e) Retention. Inventory records shall be retained by the proprietor
and made available for inspection by ATF officers.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.775 Record of securing devices.
Each proprietor shall maintain a record of securing devices by
serial number showing the number received, affixed to conveyances (in
serial order), and otherwise disposed of.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.776 Record of scale tests.
Proprietors shall maintain records of results of tests conducted in
accordance with Sec. 19.273 and Sec. 19.276.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.777 [Reserved]
Sec. 19.778 Removal on or after January 1, 1987 of Puerto
Rican and
Virgin Islands spirits, and rum imported from all other areas.
(a) General. The proprietor shall maintain separate accounts, in
proof gallons, of Puerto Rican spirits having an alcoholic content of at
least 92 percent rum, of Virgin Islands spirits having an alcoholic
content of at least 92 percent rum, and of rum imported from all other
areas removed from the processing account on determination of tax.
Quantities of spirits in these categories that are contained in products
mixed in processing with other alcoholic ingredients may be determined
by using the methods provided in paragraphs (b), (c), or (d) of this
section. The proprietor shall report these quantities monthly on Form
5110.28, Monthly Report of Processing Operations, as provided in
Sec. 19.792.
(b) Standard method. For purposes of the separate accounts,
quantities of spirits in the above categories may be determined based on
the least amount of such spirits which may be used in each product as
stated in the approved formula, ATF F 5110.38.
(c) Averaging method. For purposes of the separate accounts,
quantities of spirits in the above categories may be determined by
computing the average quantity of such spirits contained in
[[Page 374]]
all batches of the same product formulation manufactured during the
preceding 6-month period. The average shall be adjusted at the end of
each month so as to include only the preceding 6-month period.
(d) Alternative method. Distilled spirits plant proprietors who wish
to use an alternative method for determining the amount of spirits in
these categories contained as ingredients of other distilled spirits
products shall file an application with the Director. The written
application shall specifically describe the proposed alternative method,
and shall set forth the reasons for using the alternative method.
(e) Transitional rule. On January 1, 1987 the proprietor shall take
physical inventories of all Puerto Rican spirits, Virgin Islands
spirits, and rum imported from all other areas which were received into
the processing account prior to that date. These inventories may be
taken as provided in Sec. 19.402(a)(2). The results of the inventories
shall be submitted in a letter to the regional director (compliance)
within 30 days of the required date of the inventories.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended (26 U.S.C. 5555))
[T.D. ATF-239, 51 FR 40026, Nov. 4, 1986]
Sec. 19.779 Record of shipment of spirits and specially
denatured
spirits withdrawn free of tax.
(a) General. The proprietor shall prepare a record of shipment, and
forward the original to the consignee and file a copy, when:
(1) Samples of specially denatured spirits in excess of five gallons
are withdrawn in accordance with Sec. 19.540(c)(2);
(2) Spirits are withdrawn free of tax in accordance with
Sec. 19.536(a)--(c); and
(3) Specially denatured spirits are withdrawn free of tax in
accordance with Secs. 19.536(d) and 19.540.
(b) Form of record. (1) The record of shipment prescribed in this
section may consist of a proprietor's commercial invoice, bill of
lading, or another document intended for the same purpose. Any
commercial document used as a record of shipment shall:
(i) Be preprinted with the name and address of the proprietor,
(ii) Be sequentially numbered, and
(iii) Be consistently used for the intended purpose.
(2) In addition to any other information on the document, the record
of shipment shall contain, as applicable, the following information:
(i) Date of shipment;
(ii) Name, address, and permit number of consignee;
(iii) Kind of spirits;
(iv) Proof of spirits;
(v) Formula number(s), for specially denatured spirits;
(vi) Number and size of containers;
(vii) Package identification numbers or serial numbers of
containers; and
(viii) Total wine gallons (specially denatured spirits) or total
proof gallons (tax-free alcohol).
(Records relating to tax-free alcohol approved by the Office of
Management and Budget under control number 1512-0334; records relating
to specially denatured spirits approved by the Office of Management and
Budget under control number 1512-0337)
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985]
Sec. 19.780 Record of distilled spirits shipped to manufacturers
of
nonbeverage products.
(a) General. Where distilled spirits are shipped to a manufacturer
of nonbeverage products, the proprietor shall prepare a record of
shipment, forward the original to the consignee, and retain a copy.
(b) Form of record. The record of tax determination prescribed by
Sec. 19.761, or any other document issued by the proprietor and
containing the necessary information, may be used as the record of
shipment.
(c) Required information. In addition to any other information on
the document, the document used as the record of shipment must contain
the following information:
(1) Name, address and registry number of the proprietor;
(2) Date of shipment;
(3) Name and address of the consignee;
(4) Kind, proof, and quantity of distilled spirits in each
container;
(5) Number of containers of each size;
(6) Package identification numbers or serial numbers of containers;
[[Page 375]]
(7) Serial number of the applicable record of tax determination; and
(8) For distilled spirits containing eligible wine or eligible
flavors, the effective tax rate.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201 Pub.
L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
[T.D. ATF-297, 55 FR 18065, Apr. 30, 1990, as amended by T.D. ATF-379,
61 FR 31426, June 20, 1996]
Submission of Forms and Reports
Sec. 19.791 Submission of transaction forms.
Completed copies of transaction forms which must be submitted to the
regional director (compliance) under the provisions of this part shall
be submitted by the proprietor no later than the close of business the
third business day succeeding the day of the transaction as provided by
this part and by instructions on the individual forms.
(Sec. 807, Pub. L. 97-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.792 Reports.
(a) Reports required by this section shall be prepared as of the end
of the applicable reporting period. The original shall be submitted to
the regional director (compliance) and a copy retained by the
proprietor.
(b) Proprietors shall submit the following summary reports of their
operations:
------------------------------------------------------------------------
Title Form No. Reporting period
------------------------------------------------------------------------
(1) Production report................ 5110.40 Monthly.
(2) Storage report................... 5110.11 Do.
(3) Processing reports--
(i) Manufacture/bottling......... 5110.28 Do.
(ii) Denaturation (including 5110.43 Do.
articles).
------------------------------------------------------------------------
(c) All reports required by this part shall be prepared and
submitted to the regional director (compliance) not later than the 15th
day of the month following the close of the reporting period.
(Approved by the Office of Management and Budget under control number
1512-0198)
(Sec. 807, Pub. L. 96-39, 98 Stat. 284 (26 U.S.C. 5207))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50
FR 23953, June 7, 1985]
Subpart X--Production of Vinegar by the Vaporizing Process
Scope of subpart
Sec. 19.821 Production of vinegar by the vaporizing process.
The regulations in this subpart relate to the production of vinegar
by the vaporizing process. The regulations cover requirements governing
the location, qualification, changes after qualification, construction,
equipment, plant operations and records of operations at vinegar plants.
Except where incorporated by reference, the provisions of subpart A
through W and subpart Y of this part do not apply to vinegar plants
using the vaporizing process. The following provisions of this part
shall apply to this subpart: the meaning of terms, Sec. 19.11; other
businesses, Sec. 19.68; right of entry and examination, Sec. 19.81;
furnishing facilities and assistance, Sec. 19.86; restrictions as to
location, Sec. 19.131; registry of stills, Sec. 19.169; and maintenance
and preservation of records, Sec. 19.723.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, 1391, as amended
(26 U.S.C. 5501-5505))
Qualification Documents
Sec. 19.822 Application.
Each person, before commencing the business of manufacturing vinegar
by the vaporizing process shall make written application to the regional
director (compliance). The application will include:
(a) The applicant's name and principal business address (including
the plant address if different from the principal business address);
(b) Description of the extent of the premises;
(c) Description of the type of operations to be conducted; and
[[Page 376]]
(d) Description of the stills including the name and residence of
the owner, the kind of still, its capacity and the purpose for which it
was set up.
The applicant shall receive and approved application from the regional
director (compliance) prior to commencing business.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, (26 U.S.C. 5502))
Sec. 19.823 Changes after original qualification.
When there is a change in the information recorded in the original
approved application, the proprietor shall make a written notice of the
change to the regional director (compliance). The notice will identify
the change and the effective date of the change.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, (26 U.S.C. 5502))
Sec. 19.824 Notice of permanent discontinuance of business.
A proprietor who intends to permanently discontinue operations shall
make written notice to the regional director (compliance). The
proprietor shall include in the notice a statement of the status of the
stills.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, (26 U.S.C. 5502))
Construction and Equipment
Sec. 19.825 Construction and equipment.
A proprietor of a vinegar plant shall construct and equip the
vinegar plant so that--
(a) The distilled spirits vapors that are separated by the
vaporizing process from the mash produced by the manufacturer are
condensed only by introducing them into the water or other liquid used
in making the vinegar; and
(b) The distilled spirits produced can be accurately accounted for
and are secure from unlawful removal from the premises or from
unauthorized use.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, (26 U.S.C. 5502))
Plant Operations
Sec. 19.826 Authorized operations.
Vinegar manufacturers qualified under this subpart are authorized
to--
(a) Produce vinegar only by the vaporizing process; and
(b) Produce distilled spirits of 30 degrees of proof or less only
for use in the manufacture of vinegar on the vinegar plant premises.
Sec. 19.827 Conduct of operations.
Vinegar manufacturers qualified under this subpart may--
(a) Separate by a vaporizing process the distilled spirits from the
mash produced by him; and
(b) Condense the distilled spirits vapors by introducing them into
the water or other liquid used in making the vinegar.
Sec. 19.828 Removals from the premises.
No person shall remove from the vinegar plant premises vinegar or
other fluid or material containing more than 2% alcohol by volume.
Records
Sec. 19.829 Daily records.
Each manufacturer of vinegar by the vaporizing process shall keep
accurate and complete daily records of production operations that
include--
(a) The kind and quantity of fermenting or distilling materials
received on the premises;
(b) The kind and quantity of materials fermented or mashed;
(c) The proof gallons of distilled spirits produced;
(d) The proof gallons of distilled spirits used in the manufacture
of vinegar;
(e) The wine gallons of vinegar produced; and
(f) The wine gallons of vinegar removed from the premises.
Separate government records need not be kept as long as commercial
records contain all the required information.
Administrative and Miscellaneous
Sec. 19.830 Application of distilled spirits tax.
The internal revenue tax must be paid on any distilled spirits
produced in or removed from the premises of a vinegar plant in violation
of law or this subpart.
[[Page 377]]
Subpart Y--Distilled Spirits For Fuel Use
Sec. 19.901 Scope of subpart.
This subpart implements 26 U.S.C. 5181, which authorizes the
establishment of distilled spirits plants solely for producing,
processing and storing, and using or distributing distilled spirits to
be used exclusively for fuel use. This subpart relates to the
qualification and operation of such distilled spirits plants. Distilled
spirits plants established under this subpart are designated as alcohol
fuel plants.
(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.902 Waiver for alcohol fuel plants.
All provisions of subparts A through X of this part and all
provisions of 26 U.S.C. Chapter 51 are hereby waived except:
(a) Any provision specifically incorporated by reference in this
subpart and the cited authority for that provision;
(b) Any provision requiring the payment of tax;
(c) Any provisions dealing with penalty, seizure, or forfeiture
which is applicable to distilled spirits; and
(d) 26 U.S.C. 5181.
(Sec. 232, Pub. L. 93-224, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.903 Alternate methods or procedures.
The proprietor, on specific approval by the Director as provided in
this paragraph, may use an alternate method or procedure in lieu of a
method or procedure specifically prescribed in this subpart or subparts
A through X of this part where the provisions of those subparts have
been incorporated by reference in this subpart. The Director may approve
an alternate method or procedure, subject to stated conditions, when he
finds that--
(a) Good cause has been shown for the use of the alternate method or
procedure;
(b) The alternate method or procedure is within the purpose of, and
consistent with the effect intended by, the specifically prescribed
method or procedure, and affords equivalent security to the revenue; and
(c) The alternate method or procedure will not be contrary to any
applicable provision of law, and will not result in an increase in cost
to the Government or hinder the effective administration of this part.
No alternate method or procedure relating to the giving of any bond, to
the assessment, payment or collection of tax, will be authorized under
this section. Where the proprietor desires to employ an alternate method
or procedure, he shall submit a written application to do so to the
regional director (compliance), for transmittal to the Director. The
application will specifically describe the proposed alternate method or
procedure, and will set forth the reasons therefor. The proprietor shall
not employ any alternate method or procedure until the application has
been approved. The proprietor shall, during the period of authorization
of an alternate method or procedure, comply with the terms of the
approved application. Authorization for any alternate method or
procedure may be withdrawn whenever in the judgment of the Director the
revenue is jeopardized or the effective administration of this part is
hindered by the continuation of such authorization. As used in this
section, alternate methods or procedures include alternate construction
or equipment. The proprietor shall retain, as part of the records
available for examination by AFT officers, any application approved by
the Director under the provisions of this section.
(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.904 Emergency variations from requirements.
The regional director (compliance) may approve construction,
equipment, and methods of operation other than as specified in this
part, where he finds that an emergency exists and the proposed
variations from the specified requirements are necessary, and the
proposed variations--
(a) Will afford the security and protection to the revenue intended
by the prescribed specifications;
(b) Will not hinder the effective administration of this part; and
[[Page 378]]
(c) Will not be contrary to any applicable provisions of law.
Variations from requirements granted under this section are conditioned
on compliance with the procedures, conditions, and limitations with
respect thereto set forth in the approval of the application. Failure to
comply in good faith with such procedures, conditions, and limitations
will automatically terminate the authority for such variations and the
proprietor thereupon shall fully comply with the prescribed requirements
of regulations from which the variations were authorized. Authority for
any variation may be withdrawn whenever in the judgment of the regional
director (compliance) the revenue is jeopardized or the effective
administration of this part is hindered by the continuation of such
variation. Where the proprietor desires to employ such variation, he
shall submit a written application to do so to the regional director
(compliance). The application will describe the proposed variations and
set forth the reasons therefor. Variations will not be employed until
the application has been approved, except when the emergency requires
immediate action to correct a situation that is threatening to life or
property. Such corrective action may then be taken concurrent with the
filing of the application and notification of the regional director
(compliance), via telephone. The proprietor shall retain, as part of the
records available for examination by ATF officers, any application
approved by the regional director (compliance) under the provisions of
this section.
(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.905 Taxes.
Distilled spirits may be withdrawn free of tax from the premises of
an alcohol fuel plant exclusively for fuel use in accordance with this
subpart. Payment of tax will be required in the case of diversion of
spirits to beverage use or other unauthorized dispositions. The
provisions of subpart C of this part are applicable to distilled spirits
for fuel use as follows:
(a) Imposition of tax liability (Secs. 19.21 through 19.25);
(b) Assessment of tax (Secs. 19.31 and 19.32); and
(c) Claims for tax (Secs. 19.41 and 19.44).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001);
Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
[T.D. ATF-207, 50 FR 23682, June 5, 1985]
Sec. 19.906 Special (occupational) tax.
(a) General rule. A proprietor of an alcohol fuel plant established
under this subpart shall be subject to a special (occupational) tax as
prescribed in subpart Ca of this part, and shall hold a separate special
tax stamp to cover the alcohol fuel operations.
(b) Exemption for small plants (effective July 1, 1989). On and
after July 1, 1989, paragraph (a) of this section shall not apply to
small alcohol fuel plants as defined in Sec. 19.907. If the annual
production (including receipts) of a small plant exceeds 10,000 proof
gallons in any calendar year, special tax is due as provided in
Sec. 19.49(a)(1) for the special tax year (July 1 through June 30)
commencing during that calendar year, regardless of whether an
application for change of plant type under Sec. 19.921(a) has been filed
or approved. If a medium or large plant produces 10,000 or fewer proof
gallons (including receipts) in any calendar year, the plant shall be
exempt from special tax under this paragraph, as for a small plant, for
the special tax year (July 1 through June 30) commencing during that
calendar year, regardless of whether an application under Sec. 19.921(c)
has been filed or approved.
(26 U.S.C. 5081)
[T.D. ATF-271, 53 FR 17543, May 17, 1988, as amended by T.D. ATF-285, 53
FR 12609, Mar. 28, 1989; T.D. ATF-312, 56 FR 31077, July 9, 1991]
Definitions
Sec. 19.907 Meaning of terms.
When used in this subpart, and in forms prescribed under this
subpart, terms shall have the meaning given in this section. Words in
the plural form include the singular and vice versa, and words
indicating the masculine gender include the feminine. The terms
``includes'' and ``including'' do not exclude
[[Page 379]]
things not enumerated which are in the same general class.
Alcohol fuel plant or plant. An establishment qualified under this
subpart solely for producing, processing and storing, and using or
distributing distilled spirits to be used exclusively for fuel use.
Alcohol fuel producer's permit. The document issued pursuant to 26
U.S.C. 5181 authorizing the person named therein to engage in business
as an alcohol fuel plant.
ATF officer. An officer or employee of the Bureau of Alcohol,
Tobacco and Firearms (ATF) authorized to perform any function relating
to the administration or enforcement of this subpart.
Bonded premises. The premises of an alcohol fuel plant where
distilled spirits are produced, processed and stored, and used or
distributed. Premises of small alcohol fuel plants, which are exempt
from bonding under Sec. 19.912(b), shall be treated as bonded premises
for purposes of this subpart.
CFR. The Code of Federal Regulations.
Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the
Department of the Treasury, Washington, DC.
Fuel alcohol. Distilled spirits which have been rendered unfit for
beverage use at an alcohol fuel plant as provided in this subpart.
Gallon or wine gallon. The liquid measure equivalent to the volume
of 231 cubic inches.
Person. An individual, trust, estate, partnership, association,
company or corporation.
Proof. The ethyl alcohol content of a liquid at 60 degrees
Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
Proof gallon. A gallon of liquid at 60 degrees Fahrenheit which
contains 50 percent by volume of ethyl alcohol having a specific gravity
of 0.7939 at 60 degrees Fahrenheit referred to water at 60 degrees
Fahrenheit as unity, or the alcoholic equivalent thereof.
Proprietor. The person qualified under this subpart to operate the
alcohol fuel plant.
Region. A Bureau of Alcohol, Tobacco and Firearms region.
Regional director (compliance). The principal regional official
responsible for administering regulations in this subpart.
Render unfit for beverage use. The addition to distilled spirits of
materials which will not impair the quality of the spirits for fuel use
as prescribed and authorized by the provisions of this subpart.
Secretary. The Secretary of the Treasury or his delegate.
Spirits or distilled spirits. That substance known as ethyl alcohol,
ethanol, or spirits of wine in any form (including all dilutions and
mixtures thereof from whatever source or by whatever process produced),
but not fuel alcohol unless specifically stated. For purposes of this
subpart, the term does not include spirits produced from petroleum,
natural gas, or coal.
This chapter. Title 27, Code of Federal Regulations, Chapter I [27
CFR Chapter I].
Transfer in bond. The transfer of spirits between alcohol fuel
plants or the transfer of spirits to or from a distilled spirits plant
qualified under 26 U.S.C. 5171 and an alcohol fuel plant.
Type of plant. The following three types of alcohol fuel plants are
recognized in this subpart:
(a) Small plant. An alcohol fuel plant which produces (including
receipts) not more than 10,000 proof gallons of spirits per calendar
year.
(b) Medium plant. An alcohol fuel plant which produces (including
receipts) more than 10,000 and not more than 500,000 proof gallons of
spirits per calendar year.
(c) Large plant. An alcohol fuel plant which produces (including
receipts) more than 500,000 proof gallons of spirits per calendar year.
U.S.C. The United States Code.
Permits
Sec. 19.910 Application for permit required.
Any person wishing to establish an alcohol fuel plant shall first
make application for and obtain an alcohol fuel producer's permit. The
application for a permit will be on Form 5110.74. The application, in
duplicate, will be submitted to the regional director (compliance). The
description of stills on
[[Page 380]]
the approved application constitutes registration of stills as required
by 27 CFR 196.45. Alcohol fuel producers' permits are continuing unless
automatically terminated under Sec. 19.920, suspended or revoked as
provided in Sec. 19.950, or voluntarily surrendered.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1355, as amended (26 U.S.C. 5179);
Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.911 Criteria for issuance of permit.
In general, an alcohol fuel producer's permit will be issued to any
person who completes the required application for permit and who
furnishes the required bond (if any). However, the regional director
(compliance) may institute proceedings for the denial of the
application, if the regional director (compliance) determines that:
(a) The applicant (including, in the case of a corporation, any
officer, director, or principal stockholder, and in the case of a
partnership, a partner) is, by reason of business experience, financial
standing, or trade connections, not likely to maintain operations in
compliance with 26 U.S.C. Chapter 51, or regulations issued thereunder;
or
(b) The applicant has failed to disclose any material information
required, or has made any false statement, as to any material fact, in
connection with the application; or
(c) The premises on which the applicant proposes to conduct the
operations are not adequate to protect the revenue. The procedures
applicable to denial of applications are set forth in 27 CFR Part 200.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271);
Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.912 Small plants.
Persons wishing to establish a small plant shall apply for a permit
as provided in this section. Except as provided in paragraph (c) of
Sec. 19.913, operations may not be commenced until the permit has been
issued.
(a) Application for permit. The application (Form 5110.74) shall be
submitted to the regional director (compliance) and shall set forth the
following information:
(1) Name and mailing address of the applicant, and the location of
the alcohol fuel plant if not apparent from the mailing address;
(2) A diagram of the plant premises and a statement as to the
ownership of the premises (if the premises are not owned by the
proprietor, the owner's consent to access by ATF officers must be
furnished);
(3) A description of all stills and a statement of their maximum
capacity;
(4) The materials from which spirits will be produced; and
(5) A description of the security measures to be used to protect
premises, buildings and equipment where spirits are produced, processed,
and stored.
(b) Bond. No bond is required for small plants.
(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.913 Action on applications to establish small plants.
(a) Receipt by the regional director (compliance). (1) Notice of
receipt--Within 15 days of receipt of the application, the regional
director (compliance) shall send a written notice of receipt to the
applicant. The notice will include a statement as to whether the
application meets the requirements of Sec. 19.912. If the application
does not meet those requirements, the application will be returned and a
new 15-day period will commence upon receipt by the regional director
(compliance) of the amended or corrected application.
(2) Failure to give notice. If the required notice of receipt is not
sent, and the applicant has a receipt indicating that the regional
director (compliance) has received the application, the 45-day period
provided for in paragraphs (b) and (c) of this section will commence on
the fifteenth day after the date the regional director (compliance)
received the application.
(3) Limitation. The provisions of subparagraphs (1) and (2) of this
section apply only to:
(i) The first application submitted with respect to any one small
plant in any calendar quarter; and
(ii) An amended or corrected first application.
[[Page 381]]
(b) Determination by the regional director (compliance). Within 45
days from the date the regional director (compliance) sent the applicant
a notice of receipt of a completed application, the regional director
(compliance) shall either (1) issue the permit, or (2) give notice in
writting to the applicant, stating in detail the reason that a permit
will not be issued. Denial of an application will not prejudice any
further application for a permit made by the same applicant.
(c) Presumption of approval. If, within 45 days from the date of the
notice to the applicant of receipt of a completed application, the
regional director (compliance) has not notified the applicant of
issuance of the permit or denial of the application, the application
shall be deemed to have been approved and the applicant may proceed if a
permit had been issued.
(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.914 Medium plants.
Any person wishing to establish a medium plant shall make
application for and obtain in alcohol fuel producer's permit. Operations
may not be commenced until the application has been approved and the
permit issued.
(a) Application for permit. The application (Form 5110.74) shall be
submitted to the regional director (compliance) and shall set forth the
following information:
(1) The information required by Sec. 19.912 (a);
(2) Statement of maximum total proof gallons of spirits that will be
produced and received during a calendar year:
(3) Information identifying the principal persons involved in the
business and a statement as to whether the applicant or any such person
has ever been convicted of a felony or misdemeanor under Federal or
State law; and,
(4) Statement of the amount of funds invested in the business and
the source of those funds.
(b) Bond. A bond of sufficient penal sum, as prescribed in
Sec. 19.957, is required. The bond must be submitted on Form 5110.56 and
approved before a permit may be issued.
(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.915 Large plants.
Any person wishing to establish a large plant shall make application
for and obtain an alcohol fuel producer's permit. Operations may not be
commenced until the application has been approved and the permit issued.
(a) Application for permit. The application (Form 5110.74) shall be
submitted to the regional director (compliance) and shall set forth the
following information:
(1) The information required by Sec. 19.912(a);
(2) Statement of the maximum proof gallons of spirits that will be
produced and received during a calendar year;
(3) Information identifying the principal persons involved in the
business and a statement as to whether the applicant or any such person
has ever been convicted of a felony or misdemeanor under Federal or
State law;
(4) Statement of the amount of funds invested in the business and
the source of those funds;
(5) Statement of the type of business organization and of the
persons interested in the business, supported by the items of
information listed in Sec. 19.916; and,
(6) List of the offices, the incumbents of which are authorized by
the articles of incorporation or the board of directors to act on behalf
of the proprietor or to sign the proprietor's name.
(b) Bond. A bond of sufficient penal sum, as prescribed in
Sec. 19.957, is required. The bond must be submitted on Form 5110.56 and
approved before a permit may be issued.
(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.916 Organizational documents.
The supporting information required by paragraph (a)(5) of
Sec. 19.915, includes, as applicable, copies of--
(a) Corporate documents. (1) Corporate charter or certificate of
corporate existence or incorporation.
(2) List of officers and directors, showing their names and
addresses.
[[Page 382]]
However, do not list officers and directors who have no responsibilities
in connection with the operation of the alcohol fuel plant.
(3) Certified extracts or digests of minutes of meetings of board of
directors, authorizing certain individuals to sign for the corporation.
(4) Statement showing the number of shares of each class of stock or
other evidence of ownership, authorized and outstanding, and the voting
rights of the respective owners or holders.
(b) Statement of interest. (1) Names and addresses of the 10 persons
having the largest ownership or other interest in each of the classes of
stock in the corporation, or other legal entity, and the nature and
amount of the stockholding or other interest of each, whether the
interest appears in the name of the interested party or in the name of
another for him. If a corporation is wholly owned or controlled by
another corporation, those persons of the parent corporation who meet
the above standards are considered to be the persons interested in the
business of the subsidiary, and the names thereof need be furnished only
upon request of the regional director (compliance).
(2) In the case of an individual owner or partnership, the name and
address of each person interested in the plant, whether the interest
appears in the name of the interested party or in the name of another
for that person.
(c) Availability of additional documents. The originals of documents
required to be submitted under this section and additional items
required under Sec. 19.918 such as the articles of incorporation,
bylaws, State certificate authorizing operations, or articles of
partnership or association (in the case of a partnership where required
by State law) shall be made available to any ATF officer upon request.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271);
Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.917 Powers of attorney.
The proprietor of a large plant shall execute and file with the
regional director (compliance) a Form 1534 (5000.8), in accordance with
instructions on the form, for each person authorized to sign or act on
behalf of the proprietor (Not required for persons whose authority is
furnished in the application).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))
Sec. 19.918 Information already on file and supplemental
information.
If any of the information required by Secs. 19.912 through 19.916 is
on file with the regional director (compliance), that information, if
accurate and complete, may be incorporated by reference and made a part
of the application. When required by the regional director (compliance),
the applicant shall furnish as a part of the application for permit,
additional information as may be necessary to determine whether the
application should be approved.
(Sec. 232, Pub. L. 96-223, 94 Stat. 278, (26 U.S.C. 5181))
Changes Affecting Applications and Permits
Sec. 19.919 Changes affecting applications and permits.
When there is a change relating to any of the information contained
in, or considered a part of, the application on Form 5110.74, the
proprietor shall within 30 days file with the regional director
(compliance), a written notice, in duplicate, of such change. Where the
change affects the terms and conditions of the permit the proprietor
shall within 30 days (except as otherwise provided in this subpart),
file with the regional director (compliance), in duplicate, an amended
application on Form 5110.74.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended
(26 U.S.C. 5172, 5271); Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26
U.S.C. 5181))
Sec. 19.920 Automatic termination of permits.
(a) Permits not transferable. Permits issued under this subpart
shall not be transferred. In the event of the lease, sale, or other
transfer of such a permit, or of the authorized operations, the permit
automatically terminates.
(b) Corporations. In the case of a corporation holding a permit
under this subpart, if actual or legal control of
[[Page 383]]
the permittee corporation changes, directly or indirectly, whether by
reason of change in stock ownership or control (in the permittee
corporation or in any other corporation), by operation of law, or in any
other manner, the permit may remain in effect until the expiration of 30
days after the change, whereupon the permit will automatically
terminate. However, if operations are to be continued after the change
in control, and an application for a new permit is filed within 30 days
of the change, then the outstanding permit may remain in effect until
final action is taken on the new application. When final action is taken
on the application, the outstanding permit automatically terminates.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))
Sec. 19.921 Change in type of alcohol fuel plant.
(a) Small plants. If the proprietor of a small plant wishes to
increase production (including receipts) to a level in excess of 10,000
proof gallons of spirits per calendar year, the proprietor shall first
furnish a bond and obtain an amended permit by filing application under
Sec. 19.914 or Sec. 19.915, as applicable. Information filed with the
original application for permit need not be resubmitted, but may be
incorporated by reference in the new application.
(b) Medium plants. Where the proprietor of a medium plant intends to
increase production (including receipts) above 500,000 proof gallons of
spirits per calendar year, the proprietor shall first obtain an amended
permit by filing an application under Sec. 19.915. A new or
strengthening bond may be required (see Sec. 19.956). Information
already on file may be incorporated by reference in the new application.
(c) Curtailment of activities. Proprietors of large or medium plants
who have curtailed operations to a level where they are eligible to be
requalified as medium or small plants may, on approval of a letter of
application by the regional director (compliance), be relieved from the
additional requirements incident to their original qualification. In the
case of a change to small plant status, termination of the bond and
relief of the surety from further liability shall be as provided in
subpart H of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271);
Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.922 Change in name of proprietor.
Where there is to be a change in the individual, firm, or corporate
name, the proprietor shall, within 30 days of the change, file an
application to amend the permit; a new bond or consent of surety is not
required.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended
(26 U.S.C. 5172, 5271); Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26
U.S.C. 5181))
Sec. 19.923 Changes in officers, directors, or principal
persons.
Where there is any change in the list of officers, directors, or
principal persons, furnished under the provisions of Sec. 19.914,
Sec. 19.915 or Sec. 19.916, the proprietor shall submit, within 30 days
of any such change, a notice in letter form stating the changes in
officers, directors, or principal persons. A new list reflecting the
changes will be submitted with the letter notice.
(Sec. 232, Pub. L. 96-233, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.924 Change in proprietorship.
(a) General. If there is a change in the proprietorship of a plant
qualified under this part, the outgoing proprietor shall comply with the
requirements of Sec. 19.945 and the successor shall, before commencing
operations, apply for and obtain a permit and file the required bond (if
any) in the same manner as a person qualifying as the proprietor of a
new plant.
(b) Fiduciary. A successor to the proprietorship of a plant who is
an administrator, executor, receiver, trustee, assignee or other
fiduciary, shall comply with the applicable provisions of
Sec. 19.186(b).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))
Sec. 19.925 Continuing partnerships.
If under the laws of the particular State, the partnership is not
immediately terminated on death or insolvency of a partner, but
continues until
[[Page 384]]
the winding up of the partnership affairs is completed, and the
surviving partner has the exclusive right to the control and possession
of the partnership assets for the purpose of liquidation and settlement,
the surviving partner may continue to operate the plant under the prior
qualification of the partnership. However, in the case of a large or a
medium plant, a consent of surety must be filed, wherein the surety and
the surviving partner agree to remain liable on the bond. If the
surviving partner acquires the business on completion of the settlement
of the partnership, he shall qualify in his own name from the date of
acquisition, as provided in Sec. 19.924(a). The rule set forth in this
section will also apply where there is more than one surviving partner.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172);
Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.926 Change in location.
Where there is a change in the location of the plant or of the area
included within the plant premises, the proprietor shall file an
application to amend the permit and, if a bond is required, either a new
bond or a consent of surety on Form 1533 (5000.18). Operation of the
plant may not be commenced at the new location prior to issuance of the
amended permit.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended
(26 U.S.C. 5172, 5271); Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26
U.S.C. 5173); Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Alternate Operations
Sec. 19.930 Alternating proprietorship.
(a) General. (1) An alcohol fuel plant, or a part thereof, may be
operated alternately by proprietors if--
(i) The alcohol fuel plant and the proprietors are otherwise
qualified under the provisions of this subpart, and
(ii) The necessary operations bonds (if any) and applications
covering such operations have been filed with and approved by the
regional director (compliance).
(2) Where alternating proprietorship is to be limited to a part of a
plant, that part must be suitable for qualification as a separate plant.
(b) Qualifying Documents. Each person desiring to operate an alcohol
fuel plant as an alternating proprietor shall file with the regional
director (compliance):
(1) An application on Form 5110.74 to cover the proposed alternation
of premises.
(2) Diagram of premises, in duplicate, showing the arrangement under
which the premises will be operated. Diagrams will be prepared in
accordance with paragraph (c) of this section.
(3) Evidence of existing operations bond (if any), consent of
surety, or a new operations bond to cover the proposed alternation of
premises.
(4) When required by the regional director (compliance), additional
information as may be necessary to determine whether the application
should be approved.
(c) Diagram of premises. Each person filing an application for
operation of a plant as an alternating proprietor shall submit a diagram
of the premises. Where operations by alternating proprietors are limited
to parts of a plant, a diagram which designates the parts of the plant
that are to be alternated will be submitted. A diagram will be submitted
for each arrangement under which the premises will be operated. The
diagram will be in sufficient detail to establish the boundaries of the
plant or any part thereof which is to be alternated.
(d) Alternation Journal. Once the applications have been approved
and initial operations conducted thereunder, the plant, or parts
thereof, may be alternated. The outgoing and incoming proprietor shall
enter into an alternation journal the following information:
(1) Name or trade name;
(2) Alcohol fuel plant permit number;
(3) Date and time of alternation; and
(4) Quantity of spirits transferred in proof gallons.
The alternation journal will remain in the possession of the incoming
proprietor until the premises are again alternated whereupon it will be
transferred to the new incoming proprietor.
[[Page 385]]
(e) Commencement of operations. Except for spirits transferred to
the incoming proprietor, the outgoing proprietor shall remove all
spirits from areas, rooms, or buildings to be alternated, prior to the
effective date and time shown in the alternation journal. Fuel alcohol
may be either transferred to the incoming proprietor or may be retained
by the outgoing proprietor in areas, rooms, or buildings to be
alternated when the areas, rooms, or buildings are secured with locks,
the keys to which are in the custody of the outgoing proprietor.
Whenever operation of the areas, rooms, or buildings is to be resumed by
a proprietor following suspension of operations by an alternating
proprietor, the outgoing proprietor (except proprietors of small plants)
must furnish a consent of surety on Form 1533 (5000.18) to continue in
effect the operations bond covering his operations. This is to be done
prior to alternating the premises.
(f) Records. Each proprietor shall maintain separate records and
submit separate reports. All transfers of spirits will be reflected in
the records of each proprietor. The quantity of spirits and fuel alcohol
transferred will be shown in the production and disposition records of
the outgoing proprietor. The quantity of spirits transferred will be
shown in the receipt record of the incoming proprietor. Each outgoing
and incoming proprietor shall include spirits transferred in
determinations of plant size and bond amounts. The provisions of
Sec. 19.921 regarding change in type of plant are applicable to each
proprietor. Entries into these records will be in the manner prescribed
in Secs. 19.982, 19.984, and 19.986.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended
(26 U.S.C. 5172, 5271; Sec. 805(a), Pub. 96-39, 93 Stat. 275 (26 U.S.C.
5171); Sec. 232 Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Permanent Discontinuance of Business
Sec. 19.945 Notice of permanent discontinuance.
A proprietor who permanently discontinues operations as an alcohol
fuel plant shall, after completion of the operations, file a letterhead
notice with the regional director (compliance). The notice shall be
accompanied--
(a) By the alcohol fuel producer's permit, and by the proprietor's
request that such permit be canceled;
(b) By a written statement disclosing, as applicable, whether (1)
all spirits (including fuel alcohol) have been lawfully disposed of, and
(2) any spirits are in transit to the premises; and
(c) By a report covering the discontinued operations (the report
shall be marked ``Final Report'').
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended
(26 U.S.C. 5172, 5271); Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26
U.S.C. 5181))
Suspension or Revocation of Permits
Sec. 19.950 Suspension or revocation.
Whenever the regional director (compliance) has reason to believe
that any person holding an alcohol fuel producer's permit--
(a) Has not in good faith complied with the applicable provisions of
26 U.S.C. Chapter 51, or regulations issued thereunder; or
(b) Has violated conditions of the permit; or
(c) Has made any false statements as to any material fact in the
application therefor; or
(d) Has failed to disclose any material information required to be
furnished; or
(e) Has violated or conspired to violate any law of the United
States relating to intoxicating liquor or has been convicted of any
offense under Title 26, U.S.C. punishable as a felony or of any
conspiracy to commit such offense; or
(f) Has not engaged in any of the operations authorized by the
permit for a period of more than 2 years; the regional director
(compliance) may institute proceedings for the revocation or suspension
of the permit in accordance with the procedures set forth in 27 CFR part
200.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))
Bonds
Sec. 19.955 Bonds.
An operations bond is required for medium and large plants. The bond
will
[[Page 386]]
be executed, in duplicate, on Form 5110.56. Surety bonds may be given
only with corporate sureties holding certificates of authority from, and
subject to the limitations prescribed by, the Secretary as set forth in
the current revision of Treasury Department Circular 570. However, in
lieu of corporate surety the proprietor may pledge and deposit as surety
for his bond, securities which are transferable and are guaranteed as to
both interest and principal by the United States, in accordance with the
provisions of 31 CFR part 225. The regional director (compliance) will
not release such securities until liability under the bond for which
they were pledged has been terminated.
(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173); CH. 390,
Pub. L. 80-280, 61 Stat. 648, 650 (31 U.S.C. 9301, 9303, 9304, 9306);
Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.956 Amount of bond.
The penal sum of the bond is based on the total quantity of
distilled spirits to be produced (including receipts) during a calendar
year. If the level of production and/or receipts at the plant is to be
increased, and the bond is not in the maximum penal sum, a new or
strengthening bond shall be obtained.
(a) Medium plants. A medium plant which will produce (including
receipts) between 10,000 and 20,000 proof gallons of spirits per year
requires a bond in the amount of $2,000. For each additional 10,000
proof gallons (or fraction thereof), the bond amount is increased
$1,000. The maximum bond for a medium plant is $50,000.
(b) Large plants. The minimum bond for a large plant is $52,000
(more than 500,000, but not more than 510,000 proof gallons annual
production (including receipts)). For each additional 10,000 (or
fraction) proof gallons, the amount of the bond is increased $2,000. The
maximum bond for a large plant is $200,000 (more than 1,240,000 proof
gallons).
(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173); Sec. 232,
Pub. L. 96-233, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.957 Instructions to compute bond penal sum.
(a) Medium plants. To find the required amount of your bond,
estimate the total proof gallons of spirits to be produced and received
in a calendar year. The amount of the bond is $1,000 for each 10,000
proof gallons (or fraction), subject to a minimum of $2,000 and a
maximum of $50,000. The following table provides some examples:
Annual Production and Receipts in Proof Gallons
------------------------------------------------------------------------
But not Amount
More than over of bond
------------------------------------------------------------------------
10,000.............................................. 20,000 $2,000
20,000.............................................. 30,000 3,000
90,000.............................................. 100,000 10,000
190,000............................................. 200,000 20,000
490,000............................................. 500,000 50,000
------------------------------------------------------------------------
(b) Large plants. To find the required amount of your bond, estimate
the total proof gallons of spirits to be produced and received in a
calendar year. The amount of the bond is $50,000 plus $2,000 for each
10,000 proof gallons (or fraction) over 500,000. The following table
provides some examples:
Annual Production and Receipts in Proof Gallons
------------------------------------------------------------------------
But not Amount
More than over of bond
------------------------------------------------------------------------
500,000............................................ 510,000 $52,000
510,000............................................ 520,000 54,000
740,000............................................ 750,000 100,000
990,000............................................ 1,000,000 150,000
1,240,000.......................................... ......... 200,000
------------------------------------------------------------------------
(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173; Sec. 232,
Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.958 Conditions of bond.
The bond shall be conditioned on payment of all taxes (including any
penalties and interest) imposed by 26 U.S.C. Chapter 51, on compliance
with all requirements of law and regulations, and on payment of all
penalties incurred or fines imposed for violations of any such
provisions.
(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173); Sec. 232,
Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
[[Page 387]]
Sec. 19.959 Additional provisions with respect to bonds.
Subpart H of this part contains further provisions applicable to
bonds which, where not inconsistent with this subpart, are applicable to
bonds of alcohol fuel plants.
Construction, Equipment and Security
Sec. 19.965 Construction and equipment.
Buildings and enclosures where distilled spirits will be produced,
processed, or stored shall be constructed and arranged to enable the
proprietor to maintain security adequate to deter diversion of the
spirits. Distilling equipment shall be constructed to prevent
unauthorized removal of spirits, from the point where distilled spirits
come into existence until production is complete and the quantity of
spirits has been determined. Tanks and other vessels for containing
spirits shall be equipped for locking and be constructed to allow for
determining the quantities of spirits therein.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))
Sec. 19.966 Security.
Proprietors shall provide security adequate to deter the
unauthorized removal of spirits. The proprietor shall store spirits
either in a building, a storage tank, or within an enclosure, which the
proprietor will keep locked when operations are not being conducted.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178);
Sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5202))
Sec. 19.967 Additional security.
If the regional director (compliance) finds that security is
inadequate to deter diversion of the spirits, as may be evidenced by the
occurrence of break-ins or by diversion of spirits to unauthorized
purposes, additional security measures may be required. Such additional
measures may include, but are not limited to, the following:
(a) The erection of a fence around the plant or the alcohol storage
facility;
(b) Flood lights;
(c) Alarm systems;
(d) Watchman services; or,
(e) Locked or barred windows.
The exact additional security requirements would depend on the extent of
the security problems, the volume of alcohol produced, the risk to tax
revenue, and safety requirements.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178);
Sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5202))
Supervision
Sec. 19.970 Supervision of operations.
The regional director (compliance) may assign ATF officers to
premises of plants qualified under this subpart. The authorities of ATF
officers, provided in Secs. 19.81 through 19.84, and the requirement
that proprietors furnish facilities and assistance to ATF officers,
provided in Sec. 19.86, apply to plants qualified under this subpart.
The provisions of Sec. 19.75 of this part pertaining to the assignment
of ATF officers and hours of operation, to the extent deemed necessary
by the regional director (compliance), are applicable to plants
qualified under this subpart.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended, 1356, as amended,
1357, as amended, 1358, as amended, 1375, as amended, 1396, as amended
(26 U.S.C. 5006, 5201, 5203, 5204, 5213, 5555); Sec. 806, Pub. L. 96-39,
93 Stat. 279 (26 U.S.C. 5202); Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26
U.S.C. 5207))
Accounting for Spirits
Sec. 19.980 Gauging.
(a) Equipment and method. Proprietors shall gauge spirits by
accurately determining the proof and quantity of spirits. The proof of
the spirits shall be determined using a glass cylinder, hydrometer, and
thermometer. Proprietors may account for fuel alcohol in wine gallons.
Unless proprietors desire to do so, it is not necessary to determine the
proof of fuel alcohol manufactured, on-hand, or removed. The Proprietor
may determine quantity either by volume or weight. A tank or receptacle
with a calibrated sight glass installed, a calibrated dipstick,
conversion charts, meters (subject to approval by the regional director
(compliance)), or other devices or methods approved by the Director, may
be used
[[Page 388]]
to determine quantity by volume. The proprietor shall ensure that
hydrometers, thermometers, and other equipment used to determine proof,
volume, or weight are accurate. From time to time ATF officers shall
verify the accuracy of such equipment. Detailed procedures for gauging
spirits are provided in 27 CFR part 30.
(b) When Required. Proprietors shall guage spirits and record the
results in their records at the following times:
(1) On completion of production of distilled spirits;
(2) On receipt of spirits at the plant;
(3) Prior to the addition of materials to render the spirits unfit
for beverage use;
(4) Before withdrawal from plant premises or other disposition of
spirits (including fuel alcohol); and
(5) When spirits are to be inventoried.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1358, as amended
(26 U.S.C. 5201, 5204))
Sec. 19.981 Inventories.
Proprietors shall take actual physical inventory of all spirits
(including fuel alcohol) on bonded premises at least once during each
period for which a report is required by Sec. 19.988. The results of the
inventory shall be posted in the applicable records required by
Sec. 19.982.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))
Sec. 19.982 Records.
(a) All plants. All proprietors shall maintain records with respect
to: (1) The quantity and proof of spirits produced; (2) The proof
gallons of spirits on-hand and received; (3) The quantities and types of
materials added to render the spirits unfit for beverage use; (4) The
quantity of fuel alcohol manufactured; and, (5) All dispositions of
spirits (including fuel alcohol). Fuel alcohol may be recorded in wine
gallons.
(b) Medium and large plants. Proprietors of medium and large plants
shall also record the kind and quantity of materials used to produce
spirits.
(c) General requirements. (1) The records must contain sufficient
information to allow ATF officers to determine the quantities of spirits
produced, received, stored, or processed and to verify that all spirits
have been lawfully disposed of or used.
(2) Records which the proprietor prepares for other purposes (i.e.
invoices or other commercial records) may be used to meet the record
requirements of this subpart, so long as they show the required
information.
(3) Where the format or arrangement of the record is such that the
information is not clearly or accurately reflected, the regional
director (compliance) may require a format or arrangement which will
clearly and accurately reflect the information.
(4) Entries required by this subpart to be made into records will be
made on the day on which the operation or transaction occurs. However,
these entries may be deferred until the third business day succeeding
the day on which the operation or transaction occurs when the proprietor
prepares commercial records concurrent with the individual operation or
transaction.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.983 Spirits rendered unfit for beverage use in
the production
process.
Where spirits are rendered unfit for beverage use before removal
from the production system, the proprietor shall enter into the
production records, in addition to the quantity and proof of spirits
produced, the kind and quantity of materials added to each lot of
spirits. In such a case, a separate record under Sec. 19.985 is not
required. The quantity of spirits produced will be determined by
substracting the quantity of materials added to render the spirits unfit
for beverage use from the quantity of fuel alcohol produced and
multiplying the resulting figure by the proof of each lot of spirits.
The proprietor shall determine the proof of each lot of spirits. The
proprietor shall procure a representative sample of each lot, prior to
the addition of any material for rendering the spirits unfit for
beverage use, and proof the sample in accordance with the provisions of
Sec. 19.980(a). This paragraph applies to in-line addition of materials
and to systems in which, before any spirits come
[[Page 389]]
off the production equipment, the proprietor adds materials for
rendering the spirits unfit for beverage use to the first receptacle
where spirits are to be deposited.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 232, Pub.
L. 96-222, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.984 Record of spirits received.
The proprietor's copy of the consignor's invoice or other document
received with the shipment, on which the proprietor has noted the date
of receipt and quantity received, constitutes the required record.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.985 Record of spirits rendered unfit for beverage
use.
The proprietor shall record the kind and quantity of materials added
to render each lot of spirits unfit for beverage use and the quantity of
fuel alcohol manufactured (which may be given in wine gallons).
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.986 Record of dispositions.
(a) Fuel alcohol removed. For fuel alcohol removed from the plant
premises, the commercial record or other document required by
Sec. 19.997 constitutes the required record.
(b) Spirits transferred. For spirits transferred in bond (including
transfers from small plants) to a distilled spirits plant qualified
under subpart G of this part or to another alcohol fuel plant, the
commercial invoice or other document required by Secs. 19.508 and 19.999
constitutes the required record.
(c) Other dispositions. For spirits or fuel alcohol used or
otherwise disposed of (e.g., lost, destroyed, redistilled) on the
premises of the alcohol fuel plant, the proprietor shall maintain a
record as follows:
(1) The quantity of spirits (in proof gallons) or fuel alcohol (in
gallons) and the date of disposition; and,
(2) The purpose for which used or the nature of the other
disposition.
(d) Separate records. Records for dispositions of fuel alcohol and
spirits will be maintained separately.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 232, Pub.
L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.987 Maintenance and retention of records.
The proprietor shall retain at the plant where an operation or
transaction occurs the records required by this subpart for a period of
not less than three years from the date thereof or from the date of the
last entry made thereon, whichever is later. Whenever any record because
of its condition becomes unsuitable for its intended or continued use
the proprietor shall reproduce the record by a process approved by the
regional director (compliance) under the provisions of Sec. 19.725. The
records shall be available for inspectin by any ATF officer during
business hours. For records maintained on data processing equipment, the
provisions of Sec. 19.723 apply.
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
Sec. 19.988 Reports.
Each proprietor shall submit an annual report of their operations,
Form 5110.75, for the calendar year ending December 31. The proprietor
shall submit this report to the regional director (compliance) by
January 30 following the end of the calendar year.
(Sec. 807, Pub. L. No. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
[T.D. ATF-327, 57 FR 32178, July 21, 1992]
Redistillation
Sec. 19.990 Redistillation of spirits or fuel alcohol received
on the
plant premises.
(a) Receipts for redistillation. Proprietors of alcohol fuel plants
may receive and redistill spirits. Fuel alcohol may be received on the
premises of an alcohol fuel plant for the recovery by redistillation of
the spirits contained therein. Spirits and fuel alcohol received for
redistillation will be identified as such and will be kept separate from
other spirits and fuel alcohol on the premises
[[Page 390]]
until redistilled. Spirits originally produced by the plant and
subsequently recovered by redistillation will not be included in
determinations of plant size and bond amounts. Spirits riginally
produced at other plants and subsequently recovered by redistillation
will be included in determinations of plant size and bond amounts.
(b) Recordkeeping. (1) The proprietor shall record in a separate
record the following information for spirits and fuel alcohol received
for redistillation.
(i) Date received;
(ii) Whether fuel alcohol or spirits;
(iii) Quantity received;
(iv) From whom received;
(v) Reason for redistillation;
(vi) Date redistilled; and
(vii) Quantity of spirits recovered by redistillation.
(2) The proprietor's commercial record required for spirits by
Sec. 19.999 or for fuel alcohol by Sec. 19.997 and any other commercial
record received covering spirits or fuel alcohol to be redistilled will
be filed separately from other records. These records may be used in
lieu of the record required by paragraph (b)(1) of this section when any
missing information required to be shown has been entered upon the
commercial record by the proprietor.
(c) Status. Spirits recovered by redistillation will be treated the
same as spirits which have not been redistilled. All provisions of this
subpart and 26 U.S.C. Chapter 51 (including liability for tax)
applicable to spirits when originally produced are applicable to spirits
recovered by redistillation.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended, 1370, as amended
(26 U.S.C. 5223, 5243); Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26
U.S.C. 5181))
Uses, Withdrawals and Transfers
Sec. 19.995 Use on premises.
Spirits may be used as a fuel on the premises of the alcohol fuel
plant at which produced and need not be rendered unfit for beverage use.
Proprietors using spirits on the plant premises shall keep the
applicable records concerning such dispositions as provided in
Sec. 19.986(c).
(Sec. 232, Pub. L. 96-223, 94 Stat. 278, (26 U.S.C. 5181))
Sec. 19.996 Withdrawal of spirits.
Before spirits may be withdrawn from the premises of an alcohol fuel
plant, they must be rendered unfit for beverage use as provided in this
subpart. Spirits rendered unfit for beverage use (fuel alcohol) may be
withdrawn free of tax from plant premises exclusively for fuel use.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214);
Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.997 Withdrawal of fuel alcohol.
For each shipment or other removal of fuel alcohol from the plant
premises the consignor shall prepare a commercial invoice, sales slip,
or similar document. The consignor shall enter on the document the date,
the quantity of fuel alcohol removed, a description of the shipment (for
example, number and size of containers, tank truck, etc.), and the name
and address of the consignee. The consignor shall retain a copy of the
document as a record.
(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.998 Transfer in bond of spirits.
(a) Transfer between alcohol fuel plants. A proprietor may remove
spirits from the bonded premises of an alcohol fuel plant (including the
premises of a small plant) for transfer in bond to another alcohol fuel
plant. Bulk conveyances in which spirits are transferred shall be
secured with locks, seals or other devices as prescribed by Sec. 19.96.
The spirits need not be rendered unfit for beverage use prior to
transfer. Spirits so transferred may not be withdrawn, used, sold, or
otherwise disposed of for other than fuel use.
(b) Transfer to or from other distilled spirits plants. Spirits (not
including spirits produced from petroleum, natural gas, or coal) may be
transferred in bond from distilled spirits plants qualified under
subpart G of this part to alcohol fuel plants. Alcohol fuel plants may
transfer spirits in bond to distilled spirits plants qualified under
subpart G of this part. Bulk conveyances in which spirits are
transferred shall be secured with locks, seals, or other devices as
prescribed by Sec. 19.96. The spirits need not be rendered unfit for
beverage use
[[Page 391]]
prior to transfer. Spirits so transferred may not be withdrawn, used,
sold, or otherwise disposed of for other than fuel use.
(c) Transfer procedures. The procedures in Secs. 19.999 through
19.1001 pertain only to the transfer of spirits between alcohol fuel
plants. The procedures in Secs. 19.506 through 19.509 and 19.770 pertain
to the transfer of spirits from an alcohol fuel plant to a distilled
spirits plant qualified under 26 U.S.C. 5171. The alcohol fuel plant
transferring in bond spirits filled into portable containers to the
bonded premises of a distilled spirits plant qualified under 26 U.S.C.
5171 shall mark each container as required by Sec. 19.1008(b). The
procedures in Secs. 19.508, 19.510 and 19.770 pertain to the transfer of
spirits from a distilled spirits plant to an alcohol fuel plant.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5212);
Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.999 Consignor premises.
The consignor shall prepare, in duplicate, a commerical invoice or
shipping document to cover each shipment of spirits. The consignor shall
enter on the document the quantity of spirits transferred, the proof of
the spirits transferred, a description of the shipment (for example,
number and size of drums or barrels, tank truck, etc.), the name,
address, and permit number of the consignor and of the consignee, and
the serial numbers of seals, locks, or other devices used to secure the
conveyance. The consignor shall forward the original of the document to
the consignee with the shipment and retain the copy as a record.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5212))
Sec. 19.1000 Reconsignment in transit.
When, prior to or on arrival at the premises of a consignee, spirits
transferred in bond are found to be unsuitable for the intended purpose,
were shipped in error, or, for any other bona fide reason, are not
accepted by such consignee, or are not accepted by a carrier, they may
be reconsigned, by the consignor, to himself, or to another qualified
consignee. In such case, the bond, if any, of the proprietor to whom the
spirits are reconsigned shall cover such spirits while in transit after
reconsignment. In addition, if the spirits are reconsigned to a
distilled spirits plant qualified under subpart G of this part, an
application to receive spirits by transfer in bond (on Form 5100.16)
must have been previously approved for the consignee. Notice of
cancellation of the shipment shall be made by the consignor to the
consignee and the consignor shall note the reconsignemnt on his copy of
the document covering the original shipment. Where the reconsignment is
to another proprietor, a new document shall be prepared and prominently
marked with the word ``Reconsignment''.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, (26 U.S.C. 5212);
Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.1001 Consignee premises.
(a) General. When spirits are received by transfer in bond, the
proprietor shall examine each conveyance to determine whether the locks,
seals, or other devices are intact upon arrival at his premises. If the
locks, seals or other devices are not intact, he shall immediately
notify the area supervisor, before removal of any spirits from the
conveyance. The consignee shall determine the quantity of spirits
received and record the quantity and the date received on the document
received with the shipment. The consignee shall retain the document as
the record of receipt required by Sec. 19.984.
(b) Portable containers. When spirits are received in barrels,
drums, or similar portable containers, the proprietor shall examine each
container and, unless the transfer was made in a secured conveyance and
the seals or other devices are intact on arrival, verify the contents of
each container. The proprietor shall record the quantity received for
each container on a list, and shall attach a copy of the list to the
invoice or other document received with the shipment.
(c) Bulk conveyances and pipelines. When spirits are received in
bulk conveyances or by pipeline, the consignee shall gauge the spirits
received and
[[Page 392]]
shall record the quantity so determined on the invoice or other document
received with shipment. However, the regional director (compliance) may
waive the requirement for gauging spirits on receipt by pipeline if,
because of the location of the premises, there will be no jeopardy to
the revenue.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended
(26 U.S.C. 5204, 5212); Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26
U.S.C. 5181))
Sec. 19.1002 Prohibited uses, transfers, and withdrawals.
No person shall withdraw, use, sell, or otherwise dispose of
distilled spirits (including fuel alcohol) produced under this subpart
for other than fuel use. The law imposes criminal penalties on any
person who withdraws, uses, sells or otherwise disposes of distilled
spirits (including fuel alcohol) produced under this subpart for other
than fuel use.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1398, as amended (26 U.S.C. 5601);
Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Materials for Rendering Spirits Unfit for Beverage Use
Sec. 19.1005 Authorized Materials.
(a) General. The Director shall determine and authorize for use
materials for rendering spirits unfit for beverage use which will not
impair the quality of the spirits for fuel use. Spirits treated under
this section will be considered rendered unfit for beverage use and
eligible for withdrawal as fuel alcohol.
(b) List. The Director will compile and issue periodically a list of
materials authorized for rendering spirits unfit for beverage use. The
list will specify for each material (1) name and (2) quantity required
to render spirits unfit for beverage use. The list may be obtained at no
cost upon request from the ATF Distribution Center, 7943 Angus Court,
Springfield, Virginia 22153.
(c) Authorized material. Until issuance of the initial list of
materials authorized for rendering spirits unfit for beverage use,
proprietors are authorized to add to each 100 gallons of spirits any of
the following materials in the quantities specified.
(1) 2 gallons or more of--
(i) Gasoline or automotive gasoline (for use in engines which
require unleaded gasoline Environmental Protection Agency and
manufacturers specifications may require that unleaded gasoline be used
to render the spirits unfit for beverage use).
(ii) Kerosene,
(iii) Deodorized kerosene,
(iv) Rubber hydrocarbon solvent,
(v) Methyl isobutyl ketone,
(vi) Mixed isomers of nitropropane,
(vii) Heptane, or,
(viii) Any combination of (i) through (vii); or
(2) \1/8\ ounce of denatonium benzoate N.F. (Bitrex) and 2 gallons
of isopropyl alcohol.
(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-249, 52
FR 5961, Feb. 27, 1987]
Sec. 19.1006 Other materials.
If a proprietor desires to use a material not authorized under
Sec. 19.1005 to render spirits unfit for beverage use, the proprietor
shall submit an application to the Director. The application must state
the name of the material and the quantity of material that the
proprietor proposes to add to each 100 gallons of spirits. The
proprietor may be required to submit an 8 ounce sample of the material
with the application. Material that impairs the quality of the spirits
for fuel use will not be approved. The proprietor shall not use any
proposed material prior to its approval. Materials approved for use
under this section will appear in the next subsequent issuance of the
list of materials authorized for rendering spirits unfit for beverage
use provided for under Sec. 19.1005. The proprietor shall retain as part
of the records available for inspection by ATF officers, any application
approved by the Director under the provisions of this section.
(Sec. 232, Pub. L. 96-233, 94 Stat. 278 (26 U.S.C. 5181))
Sec. 19.1007 Samples.
A proprietor may take samples of spirits and fuel alcohol for
testing and analysis. Samples of spirits may not be
[[Page 393]]
removed from the premises of the alcohol fuel plant. Samples of fuel
alcohol may be removed from the premises of the alcohol fuel plant to a
bona fide laboratory for testing and analysis. The proprietor shall
indicate on sample containers that the spirits or fuel alcohol contained
therein is a sample. The proprietor shall account for samples in the
record provided for in Sec. 19.986.
(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))
Marks
Sec. 19.1008 Marks.
(a) Fuel alcohol. The proprietor shall conspicuously and permanently
mark or securely label each container of fuel alcohol containing 55
gallons or less that will be withdrawn from the plant premises, as
follows:
WARNING
FUEL ALCOHOL
MAY BE HARMFUL OR FATAL IF SWALLOWED
The mark or label shall be placed on the head or side of the container,
and shall be in plain legible letters. Proprietors may place other marks
or labels on containers so long as they do not obscure the required
mark.
(b) Spirits. When barrels, drums or similiar portable containers of
spirits are to be transferred by a proprietor to a distilled spirits
plant qualified under subpart G of this part, each container will be
marked or labeled in plain legible letters on the side or head to show
the following information:
(1) Quantity in wine gallons;
(2) Proof;
(3) Serial number of container;
(4) Name, address (city or town and State) and permit number of the
alcohol fuel plant; and
(5) The words ``Spirits-For Alcohol Fuel Use Only''.
Proprietors may place other marks or labels on such containers so long
as they do not obscure the required mark. Serial numbers will be
assigned consecutively commencing with ``1''. When the numbering of any
series reaches ``1,000,000'', the proprietor may recommence the series.
The recommenced series will be given an alphabetical prefix or suffix.
Where there is a change in proprietorship, or in the individual, firm,
corporate name or trade name, the series in use at the time of the
change may be continued.
(Sec. 232, Pub. L. 96-233, 94 Stat. 278, (26 U.S.C. 5181); Sec. 201,
Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))
Subpart Z--Paperwork Reduction Act
Sec. 19.1010 OMB control numbers assigned pursuant to
the Paperwork
Reduction Act.
(a) Purpose. This subpart displays the control numbers assigned to
information collection requirements in this part by the Office of
Management and Budget pursuant to the Paperwork Reduction Act of 1980,
Pub. L. 96-511. The Department intends that this subpart comply with the
requirements of section 3507(f) of the Paperwork Reduction Act, which
requires that agencies display a current control number assigned by the
Director of the Office of Management and Budget for each agency
information collection requirement.
(b) Display.
------------------------------------------------------------------------
Current OMB
Section where identified control No.
------------------------------------------------------------------------
19.21..................................................... 1512-0203
19.34..................................................... 1512-0203
19.35..................................................... 1512-0198
1512-0203
19.36..................................................... 1512-0203
19.37..................................................... 1512-0203
19.38..................................................... 1512-0203
19.41..................................................... 1512-0141
1512-0203
19.42..................................................... 1512-0141
1512-0203
19.43..................................................... 1512-0141
1512-0203
19.44..................................................... 1512-0141
1512-0203
19.45..................................................... 1512-0203
19.46..................................................... 1512-0203
19.62..................................................... 1512-0206
19.66..................................................... 1512-0206
19.67..................................................... 1512-0206
19.68..................................................... 1512-0462
19.71..................................................... 1512-0206
19.72..................................................... 1512-0206
19.73..................................................... 1512-0206
19.75..................................................... 1512-0206
19.91..................................................... 1512-0206
1512-0250
19.92..................................................... 1512-0250
19.93..................................................... 1512-0250
19.96..................................................... 1512-0206
19.98..................................................... 1512-0206
19.99..................................................... 1512-0206
19.133.................................................... 1512-0206
19.134.................................................... 1512-0206
[[Page 394]]
19.151.................................................... 1512-0206
19.152.................................................... 1512-0206
19.153.................................................... 1512-0206
19.154.................................................... 1512-0206
19.155.................................................... 1512-0206
19.157.................................................... 1512-0195
19.158.................................................... 1512-0195
19.159.................................................... 1512-0195
19.162.................................................... 1512-0195
19.165.................................................... 1512-0195
19.166.................................................... 1512-0206
19.167.................................................... 1512-0206
19.168.................................................... 1512-0206
19.170.................................................... 1512-0206
19.180.................................................... 1512-0206
19.182.................................................... 1512-0206
19.183.................................................... 1512-0195
19.184.................................................... 1512-0206
19.185.................................................... 1512-0206
19.186.................................................... 1512-0206
19.187.................................................... 1512-0206
19.189.................................................... 1512-0206
19.190.................................................... 1512-0206
19.191.................................................... 1512-0206
19.192.................................................... 1512-0206
19.193.................................................... 1512-0206
19.201.................................................... 1512-0202
1512-0206
19.202.................................................... 1512-0202
1512-0206
19.203.................................................... 1512-0202
1512-0206
19.204.................................................... 1512-0202
1512-0206
19.205.................................................... 1512-0202
1512-0206
19.206.................................................... 1512-0206
19.211.................................................... 1512-0206
19.249.................................................... 1512-0206
19.250.................................................... 1512-0206
19.251.................................................... 1512-0206
19.273.................................................... 1512-0250
19.274.................................................... 1512-0460
19.276.................................................... 1512-0250
19.277.................................................... 1512-0206
19.278.................................................... 1512-0460
19.280.................................................... 1512-0460
19.281.................................................... 1512-0206
19.311.................................................... 1512-0202
19.312.................................................... 1512-0205
19.314.................................................... 1512-0205
19.315.................................................... 1512-0205
19.316.................................................... 1512-0205
19.318.................................................... 1512-0250
19.319.................................................... 1512-0250
19.320.................................................... 1512-0192
1512-0250
19.321.................................................... 1512-0250
19.322.................................................... 1512-0250
19.324.................................................... 1512-0204
1512-0206
19.326.................................................... 1512-0205
19.327.................................................... 1512-0205
1512-0461
19.329.................................................... 1512-0250
19.342.................................................... 1512-0192
1512-0250
19.343.................................................... 1512-0250
19.344.................................................... 1512-0192
1512-0250
19.345.................................................... 1512-0461
19.347.................................................... 1512-0192
19.349.................................................... 1512-0192
19.353.................................................... 1512-0250
19.372.................................................... 1512-0198
19.373.................................................... 1512-0198
19.382.................................................... 1512-0206
19.383.................................................... 1512-0198
19.384.................................................... 1512-0198
19.385.................................................... 1512-0461
19.386.................................................... 1512-0198
1512-0461
19.387.................................................... 1512-0198
19.388.................................................... 1512-0461
19.389.................................................... 1512-0198
19.390.................................................... 1512-0198
1512-0250
1512-0461
19.391.................................................... 1512-0198
19.392.................................................... 1512-0198
19.393.................................................... 1512-0198
19.394.................................................... 1512-0189
1512-0461
19.395.................................................... 1512-0461
19.396.................................................... 1512-0461
19.397.................................................... 1512-0189
1512-0190
1512-0199
1512-0461
19.398.................................................... 1512-0189
1512-0461
19.400.................................................... 1512-0198
19.401.................................................... 1512-0250
19.402.................................................... 1512-0206
1512-0250
19.451.................................................... 1512-0207
19.453.................................................... 1512-0207
19.454.................................................... 1512-0250
19.456.................................................... 1512-0206
19.457.................................................... 1512-0207
19.458.................................................... 1512-0207
19.460.................................................... 1512-0206
19.461.................................................... 1512-0206
19.462.................................................... 1512-0250
19.463.................................................... 1512-0461
19.464.................................................... 1512-0250
19.467.................................................... 1512-0141
19.471.................................................... 1512-0207
1512-0461
19.483.................................................... 1512-0192
19.484.................................................... 1512-0250
1512-0461
19.485.................................................... 1512-0461
19.487.................................................... 1512-0203
19.501.................................................... 1512-0250
19.502.................................................... 1512-0250
19.503.................................................... 1512-0250
19.505.................................................... 1512-0191
1512-0250
19.508.................................................... 1512-0250
1512-0461
19.509.................................................... 1512-0191
1512-0250
19.510.................................................... 1512-0061
1512-0250
19.515.................................................... 1512-0203
19.516.................................................... 1512-0203
19.517.................................................... 1512-0203
1512-0250
19.518.................................................... 1512-0203
19.519.................................................... 1512-0203
19.520.................................................... 1512-0203
19.521.................................................... 1512-0203
19.522.................................................... 1512-0203
19.523.................................................... 1512-0203
19.524.................................................... 1512-0203
[[Page 395]]
19.525.................................................... 1512-0203
19.526.................................................... 1512-0203
19.532.................................................... 1512-0250
19.533.................................................... 1512-0206
19.537.................................................... 1512-0067
1512-0250
19.540.................................................... 1512-0067
1512-0077
1512-0250
1512-0461
19.541.................................................... 1512-0067
19.561.................................................... 1512-0141
19.562.................................................... 1512-0141
1512-0192
1512-0206
1512-0250
19.564.................................................... 1512-0141
19.565.................................................... 1512-0198
1512-0203
1512-0250
19.583.................................................... 1512-0461
19.587.................................................... 1512-0460
19.588.................................................... 1512-0460
19.592.................................................... 1512-0461
19.593.................................................... 1512-0461
19.594.................................................... 1512-0461
19.595.................................................... 1512-0461
19.596.................................................... 1512-0461
19.597.................................................... 1512-0206
1512-0461
19.599.................................................... 1512-0461
19.601.................................................... 1512-0461
19.602.................................................... 1512-0461
19.604.................................................... 1512-0461
19.605.................................................... 1512-0189
1512-0461
19.606.................................................... 1512-0461
19.607.................................................... 1512-0461
19.608.................................................... 1512-0461
19.610.................................................... 1512-0189
19.611.................................................... 1512-0198
19.633.................................................... 1512-0092
19.634.................................................... 1512-0206
19.635.................................................... 1512-0198
19.636.................................................... 1512-0198
19.638.................................................... 1512-0206
19.639.................................................... 1512-0198
19.640.................................................... 1512-0091
19.641.................................................... 1512-0204
1512-0461
19.642.................................................... 1512-0461
19.643.................................................... 1512-0461
19.644.................................................... 1512-0461
19.645.................................................... 1512-0461
19.646.................................................... 1512-0461
19.647.................................................... 1512-0461
19.648.................................................... 1512-0461
19.649.................................................... 1512-0461
19.650.................................................... 1512-0461
19.661.................................................... 1512-0461
19.662.................................................... 1512-0461
19.663.................................................... 1512-0206
19.664.................................................... 1512-0056
19.666.................................................... 1512-0189
19.668.................................................... 1512-0189
19.669.................................................... 1512-0056
1512-0189
19.670.................................................... 1512-0189
19.671.................................................... 1512-0189
19.672.................................................... 1512-0189
19.681.................................................... 1512-0141
1512-0203
19.682.................................................... 1512-0203
1512-0250
19.683.................................................... 1512-0250
19.684.................................................... 1512-0250
19.685.................................................... 1512-0067
19.686.................................................... 1512-0191
1512-0250
19.687.................................................... 1512-0199
19.688.................................................... 1512-0250
19.691.................................................... 1512-0250
19.701.................................................... 1512-0206
1512-0250
19.702.................................................... 1512-0250
19.703.................................................... 1512-0203
19.704.................................................... 1512-0461
19.721.................................................... 1512-0189
1512-0192
1512-0198
1512-0203
1512-0205
1512-0207
1512-0250
19.723.................................................... 1512-0189
1512-0192
1512-0198
1512-0203
1512-0205
1512-0207
1512-0250
1512-0462
19.724.................................................... 1512-0206
19.725.................................................... 1512-0206
19.731.................................................... 1512-0189
1512-0192
1512-0198
1512-0203
1512-0205
1512-0207
1512-0250
1512-0189
19.732.................................................... 1512-0192
1512-0198
1512-0203
1512-0205
1512-0207
1512-0250
19.736.................................................... 1512-0205
19.740.................................................... 1512-0192
19.741.................................................... 1512-0192
19.742.................................................... 1512-0192
19.743.................................................... 1512-0192
19.747.................................................... 1512-0198
19.748.................................................... 1512-0198
19.749.................................................... 1512-0198
19.750.................................................... 1512-0198
19.751.................................................... 1512-0198
19.752.................................................... 1512-0207
19.753.................................................... 1512-0207
19.761.................................................... 1512-0203
19.762.................................................... 1512-0203
19.763.................................................... 1512-0203
19.764.................................................... 1512-0203
19.765.................................................... 1512-0203
19.766.................................................... 1512-0250
19.767.................................................... 1512-0250
19.768.................................................... 1512-0250
19.769.................................................... 1512-0250
19.770.................................................... 1512-0215
1512-0250
19.772.................................................... 1512-0189
19.773.................................................... 1512-0198
19.774.................................................... 1512-0250
19.775.................................................... 1512-0250
19.776.................................................... 1512-0250
[[Page 396]]
19.778.................................................... 1512-0198
19.779.................................................... 1512-0067
19.780.................................................... 1512-0250
19.791.................................................... 1512-0067
1512-0190
19.792.................................................... 1512-0189
1512-0192
1512-0198
1512-0205
1512-0207
19.821.................................................... 1512-0462
19.822.................................................... 1512-0462
19.823.................................................... 1512-0462
19.824.................................................... 1512-0462
19.829.................................................... 1512-0462
19.903.................................................... 1512-0215
19.904.................................................... 1512-0215
19.905.................................................... 1512-0141
19.910.................................................... 1512-0214
19.912.................................................... 1512-0214
19.914.................................................... 1512-0214
19.915.................................................... 1512-0214
19.916.................................................... 1512-0214
19.919.................................................... 1512-0215
19.921.................................................... 1512-0214
1512-0215
19.922.................................................... 1512-0214
19.923.................................................... 1512-0215
19.924.................................................... 1512-0214
19.926.................................................... 1512-0214
19.930.................................................... 1512-0215
19.945.................................................... 1512-0215
19.980.................................................... 1512-0215
19.981.................................................... 1512-0215
19.982.................................................... 1512-0215
19.983.................................................... 1512-0215
19.984.................................................... 1512-0215
19.985.................................................... 1512-0215
19.986.................................................... 1512-0215
19.987.................................................... 1512-0215
19.988.................................................... 1512-0215
19.990.................................................... 1512-0215
19.995.................................................... 1512-0215
19.997.................................................... 1512-0215
19.998.................................................... 1512-0191
1512-0215
19.999.................................................... 1512-0215
19.1000................................................... 1512-0215
19.1001................................................... 1512-0215
19.1005................................................... 1512-0215
19.1006................................................... 1512-0215
19.1007................................................... 1512-0215
19.1008................................................... 1512-0215
------------------------------------------------------------------------
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-297, 55
FR 18065, Apr. 30, 1990]
This was last updated on August 25, 1998