Rev. Rul. 63-67

Advice has been requested whether a nonbeverage manufacturer who has elected to file monthly claims for drawback, and has filed a bond accordingly, must file a claim each month in which alcohol is used, or whether he may elect to file one claim to cover the tax on distilled spirits used in a period of two or three months. The claimant has no intention of terminating his bond.

Under the provisions of section 5131 of the Internal Revenue Code of 1954, any person using the specified distilled spirits, on which the tax has been determined, in the manufacture of certain nonbeverage products shall, upon compliance with the applicable requirements, be eligible for drawback at the time when such distilled spirits are used in the manufacture of such products.

Section 5134 of the Code provides, in part, that such drawback shall be due and payable quarterly upon filing of a proper claim with the Secretary of the Treasury or his delegate; except that, where any person entitled to such drawback shall elect in writing to file monthly claims therefor, such drawback shall be due and payable monthly upon filing of a proper claim. However, no claim shall be allowed unless filed within the three months next succeeding the quarter in which the distilled spirits covered by the claim were used.

In accordance with section 197.106 of the Federal Nonbeverage Drawback Regulations, the claim for drawback shall pertain only to distilled spirits used in the manufacture or production of nonbeverage products during any one quarter of the year, and only one claim may be filed for each quarter. However, where the manufacturer has, in writing, notified the appropriate Assistant Regional Commissioner, Alcohol and Tobacco Tax, of his intention to file claims on a monthly basis, in lieu of a quarterly basis, and has filed a bond in compliance with the provisions of section 197.107 of the regulations, claims may be filed monthly in lieu of quarterly.

The notice required to be given by section 197.106 of the regulations by a nonbeverage manufacturer in respect of filing monthly claims is one of intention only. Thus, such a manufacturer may continue to file quarterly claims if he so desires.

Accordingly, it is held that after filing notice and a good and sufficient bond, a nonbeverage manufacturer may file monthly claims for drawback, or he may file a single claim covering alcohol used during a two- or three-month period. However, such a claim must be filed not later than the close of the third month succeeding the quarter in which the alcohol was used. Moreover, the month or months covered by the claim should be specifically identified. Also, a monthly claimant filing a combined claim may be required to separate the necessary data into the individual months covered by the claim.