Rev. Proc. 59-18

SECTION 1. PURPOSE.

In order to continue to procure and deal in specially denatured spirits (formerly called specially denatured alcohol) on and after July 1, 1959, dealers are required to make application on Form 1474 (Revised April 1959), Application for Permit to Deal in Specially Denatured Spirits, for an industrial use permit (formerly called a basic permit) to deal in specially denatured spirits and an application on Form 1477 (Revised April 1959), Application and Withdrawal Permit of Bonded Dealer to Procure Specially Denatured Spirits, for a permit to procure specially denatured spirits.

SEC. 2. BACKGROUND.

Section 5271 of the Internal Revenue Code of 1954, as amended by the Excise Tax Technical Changes Act of 1958, Public Law 85-859, C.B. 1958-3, 92, provides that no person shall procure or deal in specially denatured spirits on and after July 1, 1959, until he has filed an application and received a permit to do so.

SEC. 3. QUANTITIES TO BE SHOWN ON THE APPLICATION.

The application for an industrial use permit, Form 1474, requires that dealers state the quantity of specially denatured spirits that will be on hand, in transit, and unaccounted for at any one time. This quantity will determine the penal sum of the dealer's bond.

The application on Form 1474 requires that the dealers state the maximum quantity of specially denatured spirits which will be withdrawn during the term of the permit, considered to be one year.

SEC. 4. PERIOD TO BE ENTERED ON FORM 1477.

The entry for the beginning of the period should be July 1, 1959, but the ending date should be left blank at this time.

SEC. 5. DEALER'S BOND.

Each dealer has the choice of either submitting a new bond, Form 1475, Bond of Dealer in Specially Denatured Spirits, or continuing his current bond by filing Form 1533, Consent of Surety, extending the terms of the bond to cover specially denatured spirits on hand, in transit, and unaccounted for on and after July 1, 1959. In instances where a strengthening bond has been submitted, such bond should also be covered by a separate consent of surety. Where the quantity is increased, a strengthening bond or a new bond should be submitted.

SEC. 6. WHERE AND WHEN QUALIFYING DOCUMENTS SHOULD BE FILED.

The above described applications and bond or consent of surety with the necessary supporting documents outlined in the proposed regulations should be filed in duplicate with the appropriate Assistant Regional Commissioner, Alcohol and Tobacco Tax. They should be filed as soon as possible in order to expedite handling in the office of the Assistant Regional Commissioner.

SEC. 7. RESULT IF APPLICATIONS ARE NOT FILED PRIOR TO JULY 1, 1959.

Where a dealer does not file the two applications and the consent of surety on his bonds prior to July 1, 1959, he will not be entitled to deal in specially denatured spirits on and after July 1, 1959, and the vendor named on the dealer's current withdrawal permit will be notified by the Assistant Regional Commissioner that the dealer may not continue to withdraw specially denatured spirits.

SEC. 8. CONTINUATION OF PERMITS ON AND AFTER JULY 1, 1959.

The proposed regulations provide that if one holds both a permit as a dealer and has a valid withdrawal permit on Form 1477 on June 30, 1959, and has also filed the required applications, he may continue to deal in and withdraw specially denatured spirits on and after July 1, 1959, under such permits until final action is taken on his applications.

SEC. 9. INQUIRIES.

Inquiries in regard to this Revenue Procedure should refer to its number and be addressed to the office of the appropriate Assistant Regional Commissioner, Alcohol and Tobacco Tax.