Consolidation of Packages
Proprietors of internal revenue bonded
warehouses; and others concerned:
1. The purpose of this circular is to advise you of
amendments to warehousing regulations (26 CFR Part 225)
which provide for the consolidation of packages of distilled
spirits. The amendments are contained in Treasury Decision
6173, published in the Federal Register for May 5, 1956.
2. Under the amended regulations a warehouseman may
consolidate packages of spirits which were distilled at
190 degrees of proof or more (whether or not such proof was
subsequently reduced) from the same class of materials, by
the same distiller, at the same distillery, and were stored
in the same kind of cooperage under approximately the same
3. Briefly, the procedure is as follows:
(a) When a warehouseman desires to consolidate
spirits he will submit to the storekeeper-gauger in
charge an application fully identifying the spirits.
If the spirits are eligible and the necessary equipment is available in the warehouse, the storekeepergauger will approve the application, examine the
packages, and supervise the dumping of the spirits
into a consolidation tank.
(b) When all of the packages have been dumped
into the tank, the warehouseman will reduce the
spirits to a whole degree of proof and the storekeepergauger will gauge the spirits in the tank and prepare
a gauge report.
(c) Unless the spirits are later to be withdrawn on the filling gauge, the warehouseman
will gauge the spirits drawn from the consolidation
tank into packages and prepare the report of gauge.
4. After publication of the notice of proposed rule
making one major change was made. As originally published,
the regulations would have required the destruction of any
rinse water not used in reducing the spirits in the
consolidation tank. This has been modified to provide that,
if he so desires, the warehouseman may run any rinse water
not needed to reduce the spirits into closed, locked tanks
for transfer by pipeline to a distillery on the same or
contiguous premises, for redistillation. Prior to such
transfer the warehouseman will gauge the rinse water (by
weight or by volume), and prepare a report of gauge on
Form 1520. This procedure was also extended to other
circumstances where packages are rinsed preparatory to
removal from the warehouse. It is contemplated that rinse
water collected in tanks for redistillation will not be
held in the warehouse any longer than is necessary. Accordingly, the proposed regulations do not require that the
quantity of spirits found in the rinse water be entered in
the warehouse records. Upon receipt of the rinse water at
the distillery it will be subject to existing requirements
of distillery regulations for the receipt, recording, and
redistillation of distilled spirits.
5. The amendments made by Treasury Decision 6173 will
become effective June 5, 1956.
6. It is thought most inquiries with respect to this
new procedure can be processed by your assistant regional
commissioner and should, accordingly, be addressed to him
and refer to the number of this circular. Correspondence
with this office should similarly refer to the number of
this circular and, in addition, be marked: Attention: 0:AT:PP.
Dwight E. Avis
Director, Alcohol and Tobacco Tax Division