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Industry Circular

Number: 77-19

Date: September 19, 1977

Department of the Treasury

Bureau of Alcohol, Tobacco and Firearms

Washington, DC 20226

Seal

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IMPLEMENTATION INSTRUCTIONS FOR TREASURY DECISION ATF-46

To Proprietors of Distilled Spirits Plants and Others Concerned:

PURPOSE. This circular is issued to provide you with a reprint of Treasury Decision ATF-46, amending 27 CFR Parts 170, 173, 186, 194, 201, 250, 251, and 252 (published in the FEDERAL REGISTER of September 6, 1977, to be effective January 1, 1978); to highlight some of the more significant changes, to provide you with information necessary to implement certain provisions of the revised regulations, and to announce that ATF will present a series of informational meetings to better acquaint industry members with the provisions of the new regulations.

BACKGROUND. Treasury Decision ATF-46, generally prescribes revised requirements for the records and reports system at DSP bottling premises, amends regulatory provisions concerning the sealing of conveyances of distilled spirits, and revises procedures for preparing and disposing of numerous DSP transaction forms. Specific changes (outlined in the preamble to the Treasury decision) include: (1) provisions for waiver of one of the two required physical inventories of controlled stock; (2) use of letterhead application for approval and use of distinctive liquor bottles, in lieu of ATF Form 4329; (3) transfer, from ATF officers to plant proprietors, of the responsibility for sealing conveyances used to transport spirits; (4) use of commercial records in lieu of ATF Form 122; (5) transfer of custody of distilled spirits stamps from ATF officers to plant proprietors; (6) requirement for maintenance of records of proof and fill tests; (7) waiver of requirement for submission of ATF Form 338 for wholesalers (including DSP wholesalers); and (8) provision for relief from recording case serial numbers of dispositions by distilled spirits plant whole- salers, upon approval of an application submitted to the regional regulatory administrator.

APPROVAL OF LETTERHEAD APPLICATIONS. The revised regulations provide for variation from certain regulatory require- ments pursuant to approval of letterhead applications. Specifi- cally, DSP proprietors may be relieved of the requirement of recording the serial numbers of cases of distilled spirits disposed of on invoices pursuant to approval of an application submitted to their regional regulatory administrator. In addition, the revised regulations provide for waiver of one of the required physical inventories of controlled stock on approval by the regional regulatory administrator, and also on application to the regional regulatory administrator, the required inventory (ies) may be taken on dates other than June 30 and December 31. In order to provide proprietors full benefit of these changes as quickly as possible, applications will be processed by regional regulatory administrators prior to the effective date of the regulations; however, operations conducted pursuant to these approvals may not commence until the effective date of the Treasury decision.

DUMP AND BATCH RECORDS. The revised regulations provide for use of commercial records instead of ATF Form 122, to record the dumping of spirits and the preparation of batches on DSP bottling premises. Several individuals have inquired about the possibil- ity of utilizing ATF Form 122 as their commercial record. The Bureau does not object to use of ATF Form 122 as the commercial dump and/or batch record, provided the information entered on the form meets the new requirements in 27 CFR 201.432 (includ- ing requirements for recording nonalcoholic ingredients). This rationale also applies to proprietors utilizing combination forms (e.g., combinations of ATF Forms 179-122-2637 or 122-2637).

PROOF AND FILL TEST RECORDS. DSP proprietors will be required to maintain daily records of the results of all proof and fill tests made. Although this is a new requirement, the Bureau believes that most DSP proprietors currently maintain these records.

ATF ASSISTANCE WITH RESPECT TO NEW COMMERCIAL RECORDS. One of the purposes of conversion from Government forms to commercial records is to eliminate the necessity for duplicate recordkeeping, while maintaining information necessary for the Bureau to determine compliance with applicable laws and regulations. Two of the most important requirements with respect to such commercial records, are that the format and arrangement of such records must clearly and adequately reflect the operations, and that such records must be readily accessible to ATF officers for inspection and copying. If you have questions as to whether your commercial records comply with these requirements, do not hesitate to contact the ATF officer assigned to your plant, or if none is assigned, contact your area supervisor.

SEALING OF CONVEYANCES BY PROPRIETORS. One of the major changes effected by the Treasury decision will require the use of serially numbered seals, or locks or other devices on con- veyances used to transport spirits in bond, and withdrawn taxpaid, free of tax, or without payment of tax. Proprietors will be required to obtain the Director's approval of the seals, locks, or other devices used on conveyances used to transport spirits in bond, and withdrawn free of tax or without payment of tax. Such approval will not be required for seals, locks or other devices used on conveyances for transporting taxpaid spirits, denatured spirits in bond or denatured spirits withdrawn without payment of tax. Please note that the regulations provide an exception whereby regional regulatory administrators may require proprietors to have conveyances sealed by ATF officers using Government seals. This prerogative will be primarily exercised in instances where shipment of spirits in non-Government sealed conveyances might pose a jeopardy to the revenue. Proprietors who will be required to continue the system of Government sealed conveyances will be notified by their regional regulatory administrator in advance of the effective date of the revised regulations.

Those proprietors who will utilize commercial seals should submit them to the Bureau at the following address for approval: Bureau of Alcohol, Tobacco and Firearms ATTN: Chief, Chemical Branch 1200 Pennsylvania Avenue, NW. Washington, DC 20226

ATF FORM 338 -- WHOLESALE LIQUOR DEALER'S SEMIANNUAL REPORT. The revised regulations provide for waiver of submission of Form 338 by DSP proprietors, except in instances where the regional regulatory administrator determines that submission is necessary to law enforcement and protection of the revenue. DSP proprietors who are required to continue prep- aration and submission of Form 338 will be notified by the regional regulatory administrator prior to the effective date of the revised regulations.

TRANSFER OF DISTILLED SPIRITS STAMPS TO PROPRIETORS. In order to effect an orderly transfer of distilled spirits stamps from the custody of the alcohol, tobacco and firearms officer to the custody of the proprietor, the distilled spirits stamps should be jointly inventoried by such officer and the proprietor as of close of business the last business day prior to the effective

date of the revised regulations. The proprietor will submit a requisition on ATF Form 428 to the ATF officer to obtain custody of stamps. The ATF officer will render a final report on ATF Form 2739, thereby terminating his custody of the stamps. The proprietor will record receipt of the stamps (on ATF Form 2260) from the ATF officer. Proprietors are reminded that the regu- lations provide for subsequent requisition of distilled spirits stamps from the regional regulatory administrator; and that daily records of distilled spirits stamp transactions are required to be maintained.

BOTTLE STRIP STAMPS. Proprietors should note that the revised regulations provide for the requisition of bottle strip stamps directly from the regional regulatory administrator rather than the ATF officer.

SUMMARY OF FORMS CHANGES.

ATF Form 122 - Bottler's Dump and Batch Record.

Form eliminated. Proprietor's commercial records will be used in lieu of Form 122.

ATF Form 179 - Withdrawal of Spirits Tax Determined.

Form revised to facilitate reporting of multiple gauges of same product from a single tank using one Form 179. Also, distilled spirits stamps used will be reported by proprietor rather than assigned officer. Some minor changes are included in the revision.

ATF Form 206 - Withdrawal of Spirits, Specially Denatured Spirits, or Wines for Exportation.

Form will be prepared as a notice for withdrawal of spirits or wines without payment of tax, except when the exporter is not the proprietor of the bonded premises from which the spirits or wines are withdrawn. Written approval by ATF will only be required when the form is submitted and processed as an application.

ATF Form 236 - Transfer of Spirits or Denatured Spirits in Bond.

Form will be prepared as a notice rather than an application for the transfer of spirits in bond.

ATF Form 244 - Tank Certificate.

Form eliminated. A certification of accurate calibration of tanks shown in the notice of registration will be required.

ATF Form 257 - Withdrawal of Wine Spirits to Bonded Wine Cellar.

Instructions on form revised to conform to new procedures for processing ATF Forms 2629 and 2630.

ATF Form 332 - Statements by Kinds, Seasons and Years of Production of Spirits in-Bonded Warehouses.

Instructions on form revised to require original to be sent to regional regulatory administrator directly rather than through ATF officer. Clarifying instructions relating to reporting of mingled spirits, and blended brandy or rum, are also included.

ATF Form 338 - Wholesale Liquor Dealer's Semiannual Report.

Instructions on form revised. Wholesale liquor dealers (including DSP wholesalers) will submit the report only when required by the regional regulatory administrator. Report will be submitted by 15th day of month following report period rather than by the 10th.

ATF Form 428 - Requisition for Bottle Strip Stamps.

Form revised to include ordering of distilled spirits stamps by proprietor as well as bottle strip stamps. Strip stamps and distilled spirits stamps will be ordered directly from regional regulatory administrator by proprietors of DSP's rather than through the ATF officer.

ATF Form 1515 - Distilled Spirits Bottled in Bond.

Form revised to delete blocks for entering trade name and verification by ATF officer. Conforming changes to the instructions also made.

ATF Form 1577 - Destruction of Spirits.

Form revised to be a notice for destruction of spirits in bond. Form will continue to be an application for destruction of spirits withdrawn from bond on payment or determination of tax for rectification or bottling.

ATF Form 1582 - Drawback on Distilled Spirits Exported.

Form revised to delete references to Form 122 and substitute the term "dump and batch record" where applicable.

ATF Form 1583 - Certificate of Director of Customs of Collection of Internal Revenue on Imported Distilled Spirits and Wine.

Form eliminated.

ATF Form 2260 - Quarterly Report of Bottle Strip Stamps.

Form revised to include reporting for distilled spirits stamps as well as strip stamps. Title changed to "Quarterly Report of Bottle Strip Stamps or Distilled Spirits Stamps." Instruc- tions revised to require report to be submitted to regional regulatory administrator by 15th of month following end of the quarter rather than to assigned officer by 10th of the month following quarter.

ATF Form 2546 - Report of Spirits Mingled Under 26 U.S.C. 5234(a)(2).

Form instructions revised to require report to be forwarded to regional regulatory administrator with a copy to the ATF officer. Instructions have also been clarified.

ATF Form 2609 - Application for Transfer of Spirits and/or Denatured Spirits in Bond.

Form instructions revised to provide for distribution of copies by the applicant rather than by ATF officer.

ATF Form 2610 - Change in Status of Plant.

Form instructions revised to eliminate sending copies of form to regional regulatory administrator except when form is filed as a notice or as an application to alternate proprietors.

ATF Form 2612 - Taxpaid Spirits Returned to Bonded Premises.

Form revised to eliminate verification by ATF officer. Instructions revised to provide that the proprietor will forward the original and related forms to the regional regulatory administrator.

ATF Form 2629 -Gauge Report.

Form instructions revised so that ATF officer will sign form only when spirits (filled in wooden packages) are to be tax- determined on the original gauge and the gauge is made by the ATF officer (27 CFR 201.269(b)). The proprietor will also distribute all copies of form as provided in revised instructions.

ATF Form 2630 - Package Gauge Report.

Form instructions revised so that ATF officer will sign form only when spirits (filled in wooden packages) are to be tax- determined on the original gauge and the gauge is made by the ATF officer.

ATF Form 2633 - Withdrawal of Spirits Free of Tax.

Form revised to be a notice rather than an application. Form instructions revised to provide for distribution of copies by proprietor.

ATF Form 2634 - Denaturation of Spirits.

Form revised to eliminate signature by ATF officer and to provide for distribution of form by proprietor.

ATF Form 2637 - Bottling Tank Report.

Form revised to substitute block for "batch number" rather than "serial number on Form 122," to add a block for recording obscuration, to eliminate block for recording trade names and to eliminate blocks for recording verification by the ATF officer. Form instructions revised to conform with above changes and to eliminate requirement to forward copy to regional regulatory administrator.

ATF Form 2730 -Monthly Report of Production Operations.

Form instructions revised to have original forwarded to regional regulatory administrator by proprietor and a copy delivered to the ATF officer.

ATF Form 2731 - Monthly Report of Bonded Storage Operations.

Form revised to eliminate blocks for acknowledging receipt by ATF officer. Form instructions revised to have copy delivered to ATF officer and the original forwarded to the regional regulatory administrator by proprietor.

ATF Form 2732 - Monthly Report of Denaturing Operations.

Form revised to eliminate blocks for acknowledging receipt by ATF officer. Form instructions revised to have a copy delivered to the ATF officer and the original forwarded to the regional regulatory administrator by proprietor.

ATF Form 2733 - Monthly Report of Bottling Premises Operations.

Form instructions revised to have a copy delivered to the ATF officer and the original forwarded to the regional regulatory administrator by the proprietor.

ATF Form 4329 - Application & Authorization to Use Distinctive Liquor Bottles.

Form eliminated. A letter application for approval of distinctive liquor bottles will be used in lieu of a form.

ATF Form 4738 - Notice and Gauge of Spirits Returned to Bottling Premises.

Form revised to provide for dumping and gauging of returned spirits in the immediate presence of an ATF officer and to eliminate the report of supervision (Part IV). Form instructions revised to conform to the form changes.

INFORMATIONAL MEETINGS. The Bureau anticipates holding informational meetings for industry members in regions where this would be helpful prior to the effective date of the regulations. Interested industry members should contact their regional regulatory administrator so that meetings can be arranged. Interested industry members will be notified when the locations and dates of such meetings are established.

INQUIRIES. Inquiries concerning this circular should refer to its number and be addressed to the Assistant Director (Regulatory Enforcement), Bureau of Alcohol, Tobacco and Firearms, 1200 Pennsylvania Avenue, NW, Washington, DC 20226.

John Krogman

John G. Krogman

Acting Director

Attachment (2,980 KB)

 
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