Rev. Rul. 56-63

Advice has been requested whether a claim for refund of the tax paid on distilled spirits lost after taxpayment but prior to removal from an internal revenue bonded warehouse may be allowed.

Section 5006(a) of the Internal Revenue Code of 1954 provides in part that the internal revenue tax on distilled spirits shall be determined when the spirits are withdrawn from bond.

Section 5011, making provision for abatement, remission, refund, and allowance for loss or destruction of distilled spirits, provides in part that no tax shall be remitted or refunded where the loss occurs after the tax was determined, as provided in section 5006(a), and the spirits withdrawn from bond. Section 225.497 of Regulations relating to Internal Revenue Bonded Warehouses provides that nothing in section 5011 of the Internal Revenue Code or in such regulations shall be construed to authorize refund of the tax where the loss occurred after the tax was paid.

It is held that there is no interval between the determination of tax and the withdrawal of the distilled spirits from bond during which the spirits could be lost or destroyed. Accordingly, losses occurring after the tax has been determined or fixed are not allowable losses under section 5011 of the Code.