PROPOSED AMENDMENT OF 26 CFR PART 251
Importers and others concerned:
Purpose. The purpose of this industry circular is to acquaint you with the
provisions of a notice of proposed rule making, published in the Federal Register for April 21, 1959, which would affect the regulations relating to the
importation of distilled spirits, wines, and beer contained in 26 CFR Part 251.
Background. The Excise Tax Technical Changes Act of 1958, Public Law
85-859, will, effective July 1, 1959, revise chapter 51 of the Internal Revenue
Code. The proposed amendments are being made to conform to the statutory
changes, and also for clarifying purposes.
Proposed changes. Public Law 85-859 eliminates the present legal concepts under which various completely separate establishments are necessary
to perform the activities relating to the production, storage, processing, and
bottling of distilled spirits, and provides for a single functional distilled spirits
plant. It is proposed to amend 26 CFR Part 251 to delete references to such
separate establishments and employ more general terms.
Under existing law the tax on imported beer is determined on sale or
removal for consumption or sale. Section 5054(a)(2), I.R.C., as amended by
Public Law 85-859, provides that the tax on imported beer shall be determined
at the time of its importation, or, if entered into customs custody, at the time
of its removal from such custody. A conforming amendment is proposed in 26
CFR Part 251.
Under existing law and regulations, when the contents of a barrel or keg of
beer exceeds the statutory tolerance, tax is computed at the next higher statutory quantity. Section 5051(a), I.R.C., has been amended by Public Law 85-859
to eliminate the above requirement, to provide that sizes of containers and
permissible tolerances will be established by regulations, and to provide that
where the quantity of beer in a barrel or keg exceeds the tolerance provided
by regulations, the tax will be computed on the actual quantity of beer without
any benefit of the tolerance. These regulations are being amended so that the
basis for computing the tax on imported beer are compatible with the liberalizing amendments being made with respect to computing the tax on domestic
Comments. The notice of proposed rule making provides that prior to
adoption consideration will be given to any data, views, or arguments pertaining
thereto which are submitted, in writing, in duplicate, to the Director, Alcohol
and Tobacco Tax Division, Internal Revenue Service, Washington 25, D. C.,
within 30 days from the date of publication in the Federal Register.
Inquiries. Inquiries regarding this circular should refer to its number and
be addressed to the office of your assistant regional commissioner (alcohol and
Dwight E. Avis
Director, Alcohol and Tobacco Tax Division
IRS D. C. 48394