Rev. Rul. 54-436

Advice is requested whether denaturing material storage tanks may be placed underground in order to comply with insurance regulations regarding storage of inflammable solvents, and to reduce losses due to evaporation.

Section 182.95 of Regulations 3 provides that denaturing material storage tanks must be located in the denaturing material storeroom unless permanently fixed metal tanks of such size that they cannot be readily removed and so constructed that they can be securely locked with a Government lock are installed on the denaturing plant premises, but not necessarily within a room or building, for the storage of the denaturing materials.

Although the regulations do not provide for the installation of underground denaturing material storage tanks, section 182.103 thereof authorizes the Commissioner to approve details of construction and equipment in lieu of those specified in the regulations where it is shown that it is impracticable to conform to the prescribed specifications and the proposed construction and equipment will afford as much security and protection as the construction and equipment prescribed.

Since denaturing materials, such as ether, are highly inflammable and volatile, the construction of underground denaturing material storage tanks may be authorized.