PROPOSED AMENDMENT OF 26 CFR PART 252
Proprietors of distilleries, alcohol plants,
bonded warehouses, taxpaid bottling
houses, rectifying plants, bonded wine
cellars, taxpaid wine bottling houses,
wholesale liquor dealers, and others
Purpose. The purpose of this circular is to acquaint you with
the provisions of a notice of proposed rule making, published in the
Federal Register for June 11, 1959, which would amend the regulations
in 26 CFR Part 252 relating to the exportation of distilled spirits,
beer, and wines with benefit of drawback of the tax.
Background. The export drawback provisions of the Internal Revenue
Code of 1954,have been extended in certain areas by the Excise Tax
Technical Changes Act of 1958 (Public Law 85-859) to include (1) spirits
in packages filled in internal revenue bond, (2) any wines produced or
manufactured in the United States, (3) spirits bottled for domestic
consumption (including bottled-in-bond spirits) which have been restamped
and marked for export, and (4) spirits bottled in bond for export.
The proposed amendments would provide procedures whereby exporters
may avail themselves of the additional privileges on and after July 1,
Proposed Changes. The proposed amendments to 26 CFR Part 252 are
more fully described as follows:
(a) Sections 252.135 and 252.137 would be revised to apply to
any package of distilled spirits filled in internal revenue bond.
(The provisions of these sections would no longer be limited to
distillers' original packages.)
(b) A new subpart (subpart G) is proposed to provide procedures
for exporting and claiming drawback on taxpaid or tax determined wines
Which have not been bottled or packaged especially for export. The
proposed subpart would not require the maintenance of export storage
for wines, but would require that claims for drawback on wines not
bottled or packaged especially for export be supported by a certificate
of tax determination or tax status, Form 2605, executed by the bottler
or packer of the wines, as the case may be. The subpart would also
provide that persons maintaining export storage for wines could, at
their option, follow: (1) the existing procedures of Part 252 for
bottling or packaging wines especially for export, or (2) the procedures
provided in the proposed new subpart.
(c) Another new subpart (subpart H) is proposed to: (1) prescribe
procedures for restamping and marking for export spirits (including
bottled-in-bond spirits) originally bottled for domestic use, before
their removal from the premises where originally bottled, and for
claiming drawback of the tax found to have been paid or determined on
such spirits on the exportation thereof, and (2) provide that spirits
may be bottled in bond for export with benefit of drawback and so
exported after payment or determination of the internal revenue tax.
Consent of Surety. The terms of existing bond forms (Forms 1581
and 1581-A) are not broad enough to cover the additional privileges
which would be provided. Therefore, before exporters may exercise the
additional privileges with the benefits of bond coverage as prescribed
in 26 CFR 252.41, it will be necessary that such bonds be extended by
appropriate consents of surety on Form 1533. This requirement is set
forth in the proposed amendment of section 252.142 and in proposed new
sections 252.199 and 252.202.
Forms. Your assistant regional commissioner has a stock of Forms
1533 and 2605 and will issue a supply of them, and furnish you instructions
for using them, on request.
Inquiries. Inquiries concerning this industry circular should refer
to its number and be addressed to the office of your assistant regional
commissioner (alcohol and tobacco tax).
Dwight E. Avis
Director, Alcohol and Tobacco Tax Division.