Rev. Rul. 57-122

Advice has been requested whether partially demineralized water may be used in reducing the proof of spirits without such use constituting taxable rectification.

Revenue Ruling 54-619, C.B. 1954-2, 461, holds that the use of demineralized (deionized) water treated with a small quantity of citric acid or hydrochloric acid (approximately one-half pound of acid per 1,000 gallons of water) in the reduction in proof of spirits constitutes taxable rectification. Since publication of the ruling, it has been brought to the attention of the Internal Revenue Service that partially demineralized water may be similar to completely deionized water treated as provided therein.

The use of partially demineralized water will be permitted in reducing the proof of spirits only as follows:

(1) The use of water, treated by a demineralization process in which the pH is not reduced below 5, after boiling to remove carbondioxide, will be allowed for reducing the proof of distilled spirits without incurring the rectification tax and without the necessity of submitting a statement of the demineralization process.

(2) When a process of partial demineralization, in which the pH is reduced below 5 but not below 3.2, is to be used in preparing water for use in reducing the proof of distilled spirits, water samples representative of the process must be submitted, by each distiller or rectifier, to the appropriate field office laboratory for examination. The rectification tax will not be incurred by the use of demineralized water in this pH range.

(3) Water treated by demineralization or other process, in which the pH is reduced below pH 3.2, may not be used for reducing the proof of distilled spirits unless it can be shown that such use would not present a health hazard. The use of water having an acidity below pH 3.2 would constitute rectification, and any questions concerning its use for reducing the proof of distilled spirits must be referred to the Director, Alcohol and Tobacco Tax Division, Washington 25, D.C. Revenue Ruling 54-619, C.B. 1954-2, 461, is hereby supplemented.