Rev. Rul. 56-552

Permission has been requested to install a system of tanks, pipelines, and filters in the gauging room of an internal revenue bonded warehouse for filtering distilled spirits with activated carbon prior to deposit of the spirits in the bulk gauging tank.

Under the provisions of section 225.968 of the Regulations relating to the Warehousing of Distilled Spirits, filtering which consists of merely removing foreign substances may be done in the bottling-in-bond department of an internal revenue bonded warehouse. Section 225.969 of the regulations provides for the use of filter aids only when they would not change the original character or composition of the spirits, either by the abstraction of any essential constituent or the addition of any substance.

Revenue Ruling 54-185, C.B. 1954-1, 304, holds that activated carbon (under a specified maximum amount) may be added to blends of two or more straight whiskies for the purposes of clarification provided the character of the whisky is not changed thereby. (Revenue Ruling 54-352, C.B. 1954-2, 475, holds that activated carbon (subject to the same limitation as to quantity) may be used in the clarification of whisky to be bottled in bond provided the original character or composition of the whisky is not changed thereby. These two Revenue Rulings were extended by Revenue Ruling 55-217, C.B. 1955-1, 604, to include all classes and types of distilled spirits bottled in bond or bottled without rectification subject, of course, to the limitations set forth in the earlier rulings.

The question here involved is whether the distilled spirits may be filtered prior to transfer thereof to the bottling-in-bond department of the internal revenue bonded warehouse or to a rectifying plant or a taxpaid bottling house. It is held that the Assistant Regional Commissioner, Alcohol and Tobacco Tax, may authorize the installation of a system of tanks, pipelines, and filters in the gauging room of an internal revenue bonded warehouse for filtering distilled spirits with activated carbon, within authorized amounts, prior to deposit in the bulk gauging tank, under the following conditions:

(1) the character of the spirits is not changed as a result of such filtering process;

(2) such filtering will be in lieu of filtering the spirits with activated carbon in the bottling-in-bond department or in the rectifying plant, if bottled without rectification, or in the taxpaid bottling house; and,

(3) If filtering with activated carbon is also conducted in the bottling-in-bond department, the taxpaid bottling house, or the rectifying plant, a statement is furnished the storekeeper-gauger advising him whether the spirits have previously been filtered with activated carbon.