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Industry Circular

Number: 61-29

Date: June 29, 1961

Office of the Commissioner of Internal Revenue

Alcohol and Tobacco Tax Division


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Proprietors of distilled spirits plants, and others concerned:

This circular is being issued to inform proprietors of bonded storage facilities of changes which are being made in the instructions for reporting taxpaid losses from packages on Form 2731, Monthly Report of Bonded Storage Operations.

Footnote 3 on Form 2731 provides that taxpaid losses, line 26, will be included in the quantity taxpaid, line 7. Since the Form 1621 account is not adjusted for a taxpaid loss until the package sustaining such loss is removed from bond, and since the Form 1621 account balance is the on-hand figure re- ported at line 21 of Form 2731, the reporting of taxpaid losses at line 7 of Form 2731 causes an imbalance in the report. However, a balanced report will result from reporting taxpaid losses at line 26 only of Form 2731 for the month in which such losses are taxpaid and reporting total losses (original tax gallons less tax gallons withdrawn) at line 20 of Form 2731 for the month in which a package sustaining a taxpaid loss is dumped or removed from bond. Pending such revision, the modified reporting system described herein should be used on all future reports on Form 2731.

A revenue procedure will be issued respecting the gauging of packages of spirits found to have sustained a loss for which a claim for remission of tax is or maybe required and the recording of such loss in the warehouse records and reports. This procedure, when issued, will supersede Revenue Procedure 61-9.

Inquiries regarding this circular should refer to its number and be ad- dressed to your assistant regional commissioner (alcohol and tobacco tax).

Dwight Avis

Dwight E. Avis

Director, Alcohol and Tobacco Tax Division

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