Records and Reports Under 26 CFR Part 201
Proprietors of distilled spirits plants
and others concerned:
Purpose. This circular is designed to advise you of pro-
cedures relating to records and reports under the new, complete,
26 CFR Part 201.
Background. Part 201, to be effective July 1, 1960, will
prescribe uniform requirements for maintenance of records and
submission of reports by distillers, bonded warehousemen, and
rectifiers and bottlers. For the first time bonded warehousemen
of nonindustrial spirits are charged by law with the keeping of
records and with rendering reports relating to their operations.
Also, changes are made in the required records and reports for
Proprietors will be required to keep daily records of their
production, warehousing, denaturing, and rectifying and bottling
operations. Except for bonded warehousemen of nonindustrial spirits,
the daily records will be similar to those which are now kept.
(a) Production Records. Distillers' records required under
26 CFR Parts 182, 220, and 221 have been consolidated, under Part 201,
into uniform requirements. The quantity of spirits produced will be
based on the production gauge.
The production gauge no longer will be recorded on one form, such
as Form 1520 for nonindustrial spirits and Form 1440 for industrial
spirits; the form used will depend on the type of the transaction.
Pursuant to such production gauge, you must, under section 201.271,
make appropriate entry of the spirits for -
(1) deposit in storage on bonded premises;
(2) withdrawal upon determination of tax;
(3) withdrawal free of tax or without payment of tax;
(4) transfer for redistillation; or
(5) immediate denaturation.
When the spirits produced are entered for deposit in bonded storage
on the same plant premises, the production gauge and entry will be
made on Form 2629, and when they are entered for deposit in bonded
storage on another plant premises, or are entered for transfer for
redistillation, the production gauge and entry will be made on Form 236.
When the spirits produced are entered for withdrawal from bond,
the production gauge and entry will be made on the appropriate
withdrawal form, e.g., Forms 179, 206, 2633. In each of the
above instances any required package gauge will be recorded on
an accompanying Form 2630. One new concept of entry is included
in Part 201; that is, entry for immediate denaturation in production facilities. Form 2634 will be used for this production
gauge and entry. Separate daily denaturing records will be
required for spirits denatured in production facilities (section
201.620), but such denatured spirits will be consolidated with
denatured spirits manufactured and stored in storage facilities
of the same plant for reporting on your monthly report of de-
naturing operations, Form 2732.
(b) Bonded storage facilities. Under 26 CFR Part 182 bonded
warehousemen are charged with warehouse recordkeeping, while under
26 CFR Part 225 internal revenue officers maintain the warehouse
records. Part 201 places the keeping of records and the rendering
of reports of all bonded storage operations on the same basis, by
providing that bonded warehousemen shall maintain records and submit
reports relating to their operations.
Bonded warehousemen will be required to maintain three basic
records of their operations.
(1) Section 201.622 requires a daily summary of each kind of
spirits received in bonded storage, of each kind removed from bonded
storage (with the purpose for which removed), and of losses disclosed
during storage. This daily summary will aid you in preparing your
monthly report on Form 2731. This section also requires records of
certain bonded storage operations not involving receipts or removals
of spirits from storage premises.
(2) Section 201.628 requires a record of spirits deposited in
and withdrawn from bonded storage. The record of deposits will con-
sist of files of deposit forms (e.g., Forms 236, 1620, 2323, 2629,
2630) covering deposits of spirits in bonded storage. The record of
removals will consist of notations made on such forms as to the date
of withdrawal and the disposition of the spirits withdrawn from
storage, so that the files will currently reflect the details of
spirits remaining in the warehouse.
(3) Section 201.629 requires current summary accounts on
Form 1621 of all spirits deposited in, withdrawn from, and remaining
in the warehouse. If you do not presently maintain records from which
you can conveniently compile the information necessary for setting up
these accounts, you may, on request to and approval of your assistant regional commissioner, examine, in the Government office, the
assigned officer's warehouse accounts in order to set up accurate
accounts which are in agreement with those which have been main-
tained by the Government.
(c) Bottling premises. Rectifier's and bottler's records
required under 26 CFR Parts 230 and 235 have been consolidated,
under section 201.623, into uniform requirements which are, sub-
stantially, a continuation of your present requirements.
(d) Daily strip stamp record. For each day a transaction
in strip stamps occurs, you must keep a record in the manner pro-
vided by section 201.624. A separate record must be kept for each
kind of stamp (i.e., red, domestic bottled-in-bond, export bottled-
in-bond, and alcohol) and for each size or denomination. Each
record must show the number of stamps received, used, lost, mutilated,
destroyed or otherwise disposed of, and on hand at the beginning and
at the end of the day. Beginning July 1 you will no longer record
stocks of red strip stamps (other than for miniatures) by denominations,
but will group the stamps together as "standard" size. However, your
records must show the number and size of bottles to which these
standard size stamps are affixed.
Report Requirements. Proprietors will, as applicable, be
required to submit daily, monthly, and semiannual reports of their
operations as follows:
(a) Daily reports. (1) Each proprietor of bonded premises
will, under section 201.632(a), submit to the assigned officer, a
daily report on Form 2636 of his production, denaturing, warehousing,
and bottling transactions for each day on which such transactions
occur. This report may be prepared from the individual transaction
forms and will identify each kind of transaction, the number of
transaction forms involved, and the total number of cases, packages,
and proof gallons in each transaction. You will note that the form
does not require individual reporting of the proof gallons contained
in cases, or in packages, involved in each type of transaction.
However, these proof gallons must be reported in the total proof
gallons for each transaction, in column (g).
(2) Each proprietor of bonded premises will continue to submit
the daily report of withdrawals after tax determination presently
required by section 170.558. However, a form (Form 2632) is now
provided for this report.
(3) Each bottler of distilled spirits (whether bottling in
bond or after tax determination) will, under section 201.632(b), prepare and submit to the assigned officer, for each day on which
transactions occur, a daily memorandum report of spirits bottled
and strip stamps used. Separate reports will be required for green
bottled-in-bond, blue bottled-in-bond, alcohol, and red strip stamps.
Bottled-in-bond strip stamps will be reported by stamp denomination
and red strip stamps will be reported by size (small or standard).
Accordingly, during the use-up period for stocks of denominational
red strip stamps, stamps of "less than 1/2 pint" denomination will
be reported as such, and all other denominations will be reported
as "standard size" stamps. You are reminded, also, that this
daily report must show, as to spirits bottled, the number of cases
filled, the number and size of bottles per case, and the serial
numbers of such cases.
(b) Monthly Reports. Each proprietor will, under section
201.633, submit applicable reports at the end of each month of
production operations on Form 2730, of bonded storage operations
on Form 2731, of denaturing operations on Form 2732, of bottling
premises operations on Form 2733, and of taxpaid storeroom operations
on Form 338. In addition, each proprietor mingling spirits under
section 201.301 will submit, at the end of each month in which such
mingling occurs, a report thereof on Form 2546. Also, each propri-
etor bottling spirits will submit, at the end of each month, a
separate report on Form 2260 for green bottled-in-bond, blue bottled-
in-bond, alcohol, and red strip stamps. Bottled-in-bond strip stamps
will be reported by stamp denomination. Red strip stamps of less
than 1/2 pint denomination will be reported as such, and all other
denominations will be reported as "standard size" stamps. (It is
suggested that you study carefully the instructions and footnotes
on Form 2260 before preparing this form.) However, you are reminded
that the usage of "standard size" stamps must be reported by bottle
size at line 5 on Form 2260.
(c) Semiannual Report. Under section 201.634, proprietors of
bonded storage facilities will, as of June 30 and December 31 of
each year, submit a report on Form 332 of spirits in bonded storage.
The report will show spirits separately by kind and by season and
year of production. A separate report will be prepared for spirits
which have been mingled under section 201.301 and for spirits which
have not been so mingled. The summary accounts on Form 1621 may be
used to prepare this report.
Preservation of Records and Reports. You are required to
preserve records and copies of reports required by Part 201 for
a period of not less than four years from the date thereof or the
date of the last entry required to be made thereon, whichever is
the later, except that records of spirits stored on bonded premises
are to be preserved for not less than four years from the date the
spirits covered thereby are removed from your bonded premises. All
such records must be available during business hours for inspection
by any internal revenue officer.
Inquiries. Inquiries regarding this Circular should refer to
its number and be addressed to your assistant regional commissioner,
alcohol and tobacco tax.
Dwight E. Avis
Director, Alcohol and Tobacco Tax Division
IRS - D. C. - 58829