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Industry Circular

Number: 60-17

Date: May 25, 1960

Office of the Commissioner of Internal Revenue Alcohol and Tobacco Tax Division

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Status of Forms Under 26 CFR Part 201

Proprietors of distilled spirits plants and others concerned:

Purpose, This circular is designed to advise you of the forms which will be used by proprietors of distilled spirits plants beginn- ing July 1, 1960, under the provisions of the new, complete, 26 CFR Part 201.

Status of Forms. Part 201,to be effective July 1,1960, Welds together the unified distilled spirits plant as embodied in Public law 85-859. Consequently, many forms now used by you will become discon- tinued (see Schedule "A", List of discontinued forms), particularly where existing regulations require different forms for similar trans- actions. (e.g., taxpayments, transfers in bond). The discontinued form, in some instances, will be replaced in part or in whole by a revised form (see Schedule "B", list of revised forms), or by a new form (see Schedule "C", list of new forms). Other forms, listed in Schedule "D", will be continued in use without revision. The attached schedules "B", "C", and "D" do not list all forms you may need to use (for example, export procedures and forms will be found in 26 CFR Part 252); the schedules list only those forms prescribed by Part 201. Wherever an existing form has been revised or has been replaced by a new form, the revision of the existing form, or the new form, must be used beginning July 1, 1960; however, existing forms initiated before July 1, 1960, should be processed to completion, even though the com- pletion date is on or after July 1, 1960.

Explanation of Revised and New Forms. In revising existing forms, and in devising new forms, we have endeavored to make each form self- sustaining, For example, where it was possible to make a transaction form also serve as a gauge form, thereby eliminating an accompanying gauge report form, we have done so; further, where it was possible to make a transaction form also serve as an application, we have done so. The standardization under Part 201 of similar operations not only has applied new or expanded uses to existing forms, but also has required new forms to be devised. Some of the forms which will be most fre- quently used are discussed below.

(a) Form 122 - Bottlers Dump and Batch Record, The new Form 122 is a dual purpose form. It is to be used as a record of spirits or wines dumped for rectification or bottling, and as a batch record of spirits or wines rectified. This form must be used as a dump record to record all products dumped for rectification or bottling. Proprietors, subject to the approval of the assistant regional commissioner, may use another form of record in lieu of Form 122 to record batches of rectified products; however, Form 122 (for sub- mission to the assistant regional commissioner) shall be prepared in addition to the approved substitute record when spirits or wines are to be rectified and bottled or packaged especially for export with benefit of drawback.

Item 3 of Form 122 requires the proprietor to show the "trade name", if any, under which the product is to be rectified. The use of the singular form "trade name" does not prevent the entry, in item 3, of more than one trade name if the proprietor elects to rectify the batch under several trade names simultaneously. A more complete explanation of the manner of using Form 122 will be found in section 201.432.

Caution. Proprietors who, under present regulations, dump and bottle spirits pursuant to Form 230 are reminded that under Part 201 their dumping operations must be pursuant to Form 122.

(b) Form 179 - Withdrawal of Spirits Taxpaid. Form 179 is an example, under Part 201, of consolidating into one form, several forms (Forms 179, 1440, and 1519) used under present regulations for the same purpose, tax determination. Form 179 will be used whenever spirits are withdrawn from bonded premises on determination of tax. In addition, the separate application, Form 2608, now filed by bottlers for the with- drawal of spirits for rectification or bottling will be discontinued, since the applicable procedures are incorporated in Form 179. Further, the separate report of spirits gauged, Form 1520, now required for bulk taxpayment gauge under 26 CFR Parts 220, 221 and 225 will be discon- tinued, since the applicable procedures are incorporated in Form 179. However, an accompanying Form 2630 (in lieu of the Form 1520) describing packages must be prepared when tax determined bulk spirits are to be withdrawn in packages, or if the gauge for tax determination is to be made in packages.

Special Note. When tax determined spirits are withdrawn for rectification or bottling on bottling premises of the same plant, the statement of bond coverage on Form 179 is not required to be made until after tax determination. Also, when tax determined spirits are withdrawn by a remote bottler, the amount chargeable against his bond may be in an amount less than the tax on the original tax gallons shown in Part B of the Form 179, but the amount charged against the bond must be sufficient to cover the determined amount of tax.

(c) Form 236 - Transfer Spirits or Denatured Spirits in Bond. Form 236 is another example of prescribing one form for similar pro- cedures. Under existing regulations spirits of 190 degrees or more of proof for industrial use and denatured spirits are transferred in bond on Form 1440 or Form 1473, as applicable, but only under an approved application on Form 2609. Also, other spirits are transferred in bond on Form 236 pursuant to approval of the application, on such form, to receive the spirits. New Form 236 will, in each instance, be prepared by the consignor to cover the transfer in bond of all spirits and/or denatured spirits, but only on receipt of an approved application on Form 2609, initiated by the consignee.

(d) Form 257 - Witbdrawa1 of Wine Spirits to Bonded Wine Cellar. This form has been revised to simplify its preparation, filing, and handling. Form 257 will continue to be initiated by the consignee for the withdrawal of wine spirits to his bonded wine cellar. The wine spirits may be withdrawn from bond only on receipt of the approved Form 257; and each withdrawal will be made on Form 2629, Gauge Report. No additional forms are required for transfers by pipeline, or bulk conveyance, but where cases or packages are to be withdrawn Form 1620 (listing cases) or Form 2630 (describing packages), as applicable, shall also be prepared and shall accompany Form 2629.

(e) Form 1515 - Distilled Spirits Bottled in Bond. The proprietor is now responsible for gauging spirits entered for bottling in bond and preparing the bottling record, both of which, under 26 CFR Part 225, are performed by the assigned officer. Form 1515 has been revised to reflect these changes. Also, this form, when appropriately modified, will be used to record the bottling of alcohol on bonded premises, and the rebottling and restamping of bottled spirits returned to bond.

(f) Form 2629 -Gauge Report. Form 2629 will be used to record the production gauge and entry for deposit of spirits in bonded storage on the same plant premises, to record the gauge of wine spirits withdrawn pursuant to Form 257 (as indicated in paragraph (d)), and to record other required gauges where no transaction form (e.g., Forms 179, 236, 2323) is prescribed by regulations. Where spirits in packages are entered for deposit on the same plant premises, a Form 2630 describing the packages will always accompany the Form 2629.

(g) Form 2630 - Package Gauge Report. This is a new gauge form, replacing, in part, Forms 1440, 1520, and 1619, and will be used to record package gauges either on bonded or bottling premises. Form 2630 will never be used alone; it must always support a transaction form (e.g., Forms 179, 236, 2629, 2637).

(h) Form 2633 - Withdrawal of Spirits Free of Tax. This is a new form which will be used by proprietors as an application to withdraw spirits from bonded premises free of tax pursuant to approved permit; the notice of shipment of such spirits will be made on new Form 1473 in lieu of Form 1453.

(i) Form 2635 - Claim- Alcohol and Tobacco Tax. This is a new claim form which will be used in lieu of the letterhead claims required under existing regulations for remission of tax or for credit of tax. This form will not be used, however, to claim credit for tax on samples of taxpaid spirits taken by internal revenue officers under section 201.83. The assistant regional commissioner will allow (section 201.77) credit, without claim, for tax on such samples. (The proprietor may not take such credit in a tax return until he has received notice from the assistant regional commissioner that the credit has been allowed.

(j) Form 2637 - Bottling Tank Report. This is a new form which replaces Form 230 (in part) and Form 237. Rectifiers will report on this form the gauge of each batch of rectified products and the determin- ation of tax thereon, if any, under sections 5021, 5022, and 5041, I.R.C. If no tax is due, this fact must be stated on the form. If tax is due, the certificate of gauge and tax determination will be executed and one copy of the form forwarded to the assistant regional commissioner immediately on tax determination. Where Form 2637 covers the bottling of spirits or wines, without rectification, the bottler will report thereon the bottling tank gauge and execute the certificate of gauge. Whenever the Form 2637 covers products bottled or packaged especially for export with benefit of drawback, all copies of the form will be appropriately identified; one additional copy of such form will be pre- pared and submitted to the assistant regional commissioner. Bottlers who, on June 30, 1960, are using Form 230 to report the dumping and straight bottling of spirits or wines, will, on and after July 1, 1960, report the dumping of spirits or wines on Form 122 (see paragraph (a)) and will report the bottling tank gauge and the cases filled on Form 2637.

Form 206 - Withdrawal of Spirits, Specially Denatured Spirits, or Wines for Exportation. At the time the proprietor executes his "report of inspection and tax liability" it will be necessary for him to state, in a conspicuous location on the form whether the withdrawal is being made from the distillery or from the bonded warehouse; and, if spirits

are to be withdrawn from the distillery, that the withdrawal is made pursuant to production gauge and entry. These statements should, as applicable, be as follows:

(a) for spirits - "withdrawn from distillery pursuant to production gauge and entry" or "with- drawn from bonded warehouse"; and

(b) for specially denatured spirits - "withdrawn from dis- tillery" or "withdrawn from bonded warehouse."

This material will be incorporated in the next revision of the form.

Forms Procured at User's Expense. Proprietors are required by section 201.613 to furnish Forms 122, 338, and 2637, at their own expense. If your operations require the use of these forms, it is suggested that you contact your commercial printer regarding them. Sample copies of the forms will be available in the office of your assistant regional commissioner.

Inquires. Inquiries regarding this circular should refer to its number and be addressed to your assistant regional commissioner, alcohol and tobacco tax.

Dwight Avis

Dwight E. Avis

Director, Alcohol and Tobacco Tax Division

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