DETERMINATION OF PRODUCTION OF CASE AND KEG BEER
Brewers and others concerned:
Purpose. This circular is issued to inform you of the provisions of
Revenue Ruling 65-247, which is being published in Internal Revenue
Bulletin No. 44, on November 1, 1965.
Substance of Ruling. 26 CFR 245.225 requires, among other things, that
a brewer shall accurately record all beer bottled and racked, and that
he shall maintain a record reflecting shortages and overages of beer
disclosed by physical inventories taken at least once each calendar
month. The Revenue Ruling holds that these record requirements would
not be met by a brewer who records balancing figures computed from
end-of-day inventories and records of removals, consumption, and
breakage, since any determination made by such method would be automatically adjusted for any shortages or overages of case or keg beer, and
therefore be erroneous by the amounts of any such shortages or overages.
The Revenue Ruling further holds that brewers must make an independent
determination of the actual quantities of beer bottled and racked, and
that such determination must be reflected in the required records. This
determination may be accomplished by physical count, by mechanical or
electronic counters, or by other suitable methods approved by the
Assistant Regional Commissioner.
Inquiries. Inquiries regarding this circular should refer to its
number and be addressed to the office of your Assistant Regional
Commissioner, Alcohol and Tobacco Tax.
Harold A. Serr
Director, Alcohol and Tobacco Tax Division