Rev. Rul. 55-491

Information has been requested concerning the temporary storage and handling at a brewery of keg beer upon which the tax has been determined or paid and which has been repossessed from the purchaser.

Section 245.241 of the Beer Regulations makes provision for the temporary storage of repossessed bottled beer. However, no provision is made in the regulations for the temporary storage of repossessed keg beer.

Although not specifically provided in the regulations, it is held that keg beer which has been repossessed may be returned to the brewery for temporary storage pending destruction, use as material, or reconditioning, as such operation is considered a necessary incident to the brewing business. The procedure prescribed by sections 245.241 and 245.354 of the Beer Regulations should, insofar as applicable, be followed by brewers in connection with the return of such repossessed beer. No refund, credit, or remission of tax will be allowed on repossessed keg beer returned to the brewery since there is no authority therefor in the law or regulations. Accordingly, the entries for such returns on Form 103, Brewer's Monthly Report of Operations, and on Form 2051, Record of Brewery Operations, should be followed by the notation, `Not subject to refund, credit, or remission of tax.'

Repossessed keg beer returned to the brewery, and reconditioned and sold or resold without reconditioning, is again subject to the tax imposed by law when removed from the brewery