Rev. Rul. 62-163

Advice has been requested whether a claim for refund or credit of tax on taxpaid beer removed from the market and returned to stock is allowable where the brewer did not give the written notice required by section 245.161 of the Beer Regulations prior to the return of the beer to stock.

A brewer removed certain beer from the market to his brewery and returned the beer to stock without the written notice of intention required by section 245.161 of the Beer Regulations having been given to the Assistant Regional Commissioner, Alcohol and Tobacco Tax. The same beer was again removed from the brewery upon determination of tax. Subsequent thereto, a claim for credit of tax was submitted for this beer previously removed from the market. The claim was accompanied by a notice of intention to reship beer which had been removed from the market.

Under the provisions of section 245.161 of the Beer Regulations, a brewer is required to give written notice to the Assistant Regional Commissioner, Alcohol and Tabacco Tax, of taxpaid or tax-determined beer possessed by him and removed from the market which is to be destroyed in the brewery or elsewhere or which after return to the brewery is to be reconditioned, used as material, or returned to the stock of the racking room or bottling house.

The notice required by section 245.161 of the regulations is one of intention to perform an act. This provision of the regulations requires the notice to be given before the proposed action is taken by the brewer. A notice after the fact does not meet the intent of the regulations and is ineffective. With respect to beer removed from the market which is to be returned to stock, the notice (in order to constitute a proper notice under section 245.161 of the regulations) must be given prior to, at the time of, or after removal of the beer from the market but before it is returned to the stock of the brewery racking room or bottling house.

The phrase, `beer returned to stock,' relates to beer which is mingled with other bottled or keg beer in stock. Therefore, if a brewer wishes to obtain refund or credit of tax, the notice of intention to return to stock must be given before the beer is received on brewery premises unless it is to be kept segregated prior to notice and mingling with other beer in stock.