PROPOSED AMENDMENTS FOR 26 CFR PART 240
Purpose. The purpose of this industry circular is to acquaint you
with some of the important changes proposed to be made in regulations
in 26 CFR Part 240 that you should know in order for your operations to
be in compliance with the law and the regulations. Such changes are
proposed to be effective July 1, 1960. They are briefly described below:
Form 2621. Record of Bottled Wine. Each proprietor of a bonded
wine cellar who bottles wine in bond, or receives bottled vine in bond,
would be required to maintain a record on Form 2621 of the quantities
of wine bottled, received, and disposed of Champagne in bottles is not
recorded on Form 2621 until the process is complete.
The inventory of vine on hand close of business June 30, 1960,
should be the first item recorded on Form 2621 on July 1, 1960. The
inventory should be recorded in section I and identified in column (a)
as "0/H 7/1/60". Such inventory should agree with Form 702-C, Inven-
tory of Wine, for all bottled wine on hand close of business June 30,
1960, except as to bottles of unfinished champagne.
The remarks column is provided for any notations that may be neces-
sary to clarify entries of inventory overages or shortages, losses due
to breakage, etc. For example: "Column (o) includes accidental breakage
of 2.4 gallons and storage loss of 5.0 gallons" or "column (1) includes
accidental breakage of 4.8 gallons and inventory shortage of 10.0
gallons". This column may also be used for entering results of carbon
dioxide determinations. Except where such clarifying notations are
necessary, entries in this column are not required.
Form 2621 will not be furnished by the Government. Accordingly,
you should arrange with commercial printers to have a supply of the
form printed for you. Sample copies of Form 2621 may be secured from
the office of your assistant regional commissioner.
When authorized by the assistant regional commissioner, commercial
records which contain all of the required information in a form per-
mitting ready examination by internal revenue officers may be used as a
substitute for Form 2621.
Export. Provisions in respect of the removal of wine for export,
supplies on vessels and aircraft, and for deposit in a foreign-trade
zone or customs manufacturing bonded warehouse have been deleted. Such
provisions are being revised and will be incorporated in proposed 26
CFR Part 252 to be effective July 1, 1960.
Taxpaid Removals from Bond and Taxpaid Room Records. The proposed
regulations would permit omission of the names and addresses of persons
who are not trade buyers.
List of Stockholders, Officers, and Directors. Provisions in
respect of filing a list of stockholders, officers, and directors on
May 1, of each year are deleted. Proposed regulations would require an
initial list of the ten persons having the largest stock ownership and
of the officers and directors. You would be required to notify the
assistant regional commissioner, within the ten days after a change in
such stockholders, officers or directors.
Preparation and Disposition of form 257. The proposed regulations
would delete all instructions concerning the preparation and disposition
of Form 257. Such instructions are printed on Form 257 (Rev. 7-1-60).
Revised Form 257, when executed and approved, will permit withdrawals of
wine spirits from the distilled spirits plant whether from the pro-
duction facility or storage facility, or both.
Form 698 Supplemental. The proposed regulations would require
that Form 698 Supplemental be filed, in triplicate, with the Director,
Alcohol and Tobacco Tax Division.
Other Proposed Changes. The proposed regulations would also include
provisions regarding withdrawal and use of distillates containing
aldehydes, acid reduction, and the semimonthly tax return system. The
proposed regulations would also revise provisions in respect of acid
reduction, conversion of effervescent wine, serial numbers on cases,
manufacture of vermouth, refermentation of wine or wine lees, and govern-
ment offices. In addition numerous changes in terminology are proposed
to conform with 26 CFR Part 201.
Inquiries. Any inquiries regarding 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