Rev. Rul. 59-363

Advice has been requested concerning the application of section 5056(a) of the Internal Revenue Code of 1954, as contained in the Excise Technical Changes Act of 1958, C.B. 1958-3, 92, in cases where beer to which title has passed from the brewer was taxpaid prior to July 1, 1959, and removed from the market on or after such date.

Section 5057(a), as enacted in the Internal Revenue Code of 1954, specifically restricted the refund of tax or credit for tax, upon beer removed from the market, to cases where the tax on the otherwise eligible beer removed from the market was paid on or after the effective date of chapter 51 of the Code, January 1, 1955.

Section 5056 of chapter 51 of the Code has as its source section 5057(a) of the Code before amendment by the Excise Technical Changes Act of 1958. Section 5056(a), as now in effect, provides that any tax paid by any brewer on beer produced in the United States may be refunded or credited to the brewer, without interest, or if the tax has not been paid, the brewer may be relieved of liability therefor, if such beer is removed from the market and is returned to the brewery or is destroyed under the supervision required by regulations. Section 5056(a) of the Code does not contain the specific limitation found in superseded section 5057(a) of the Code restricting the relief granted with respect to refund or credit of tax to situations involving tax payment on or after the effective date of the statutory provision.

H.R. Report No. 481, 85th Congress, C.B. 1958-3, 372, at 484, states that section 5056(a) of the Code is a clarifying restatement of existing law without substantive change except that it further extends the privileges relating to removal of beer from the market by the brewer. No reference is made to the omission of the restriction referred to above.

Section 245.158 of the Beer Regulations as amended by T.D. 6384, C.B. 1959-1, 123, provides in part that beer on which the tax has been paid or determined, which is removed from the market, may be returned to the brewery and refund or credit of tax claimed thereon.

In view of the foregoing, it is held that the application of the provisions of section 5056(a) of the Code, as now in effect, should not be restricted to situations involving taxpayment of the beer on or after July 1, 1959.