Rev. Proc. 56-19

SECTION 1. PURPOSE.

This Revenue Procedure is issued to clarify and emphasize the permissible and prohibited uses and disposition of samples of distilled spirits withdrawn by proprietors from distilleries, internal revenue bonded warehouses, and bonded wine cellars.

SEC. 2. BACKGROUND.

Pursuant to the Regulations relating to (1) the Production of Distilled Spirits, (2) the Production of Brandy, (3) the Warehousing of Distilled Spirits, and (4) Wine (26 CFR, Parts 220, 221, 225, and 240, respectively), samples of distilled spirits may be obtained for the purposes specified in such regulations. These regulations also prescribe the disposition which shall be made of unused portions of samples. As it has come to the attention of the National Office that requirements relating to permissible uses of samples, and proper disposition of unused portions of samples, are not fully understood, it is desired to clarify these requirements.

SEC. 3. PERMISSIBLE USES.

Except in the case of samples withdrawn subject to tax, all samples of distilled spirits withdrawn by proprietors from distilleries, internal revenue bonded warehouses, and bonded wine cellars must be used solely for laboratory analysis or testing (including organoleptic examination). See Revenue Ruling 55-493, C.B. 1955-2, 730, which provides, in part, that samples removed from internal revenue bonded warehouses for any purpose other than organoleptic examination or laboratory analysis, regardless of size or number, must be taxpaid. It is intended that such analyses and tests shall consists of determinations of the kind and quantity of the components of the spirits or of the intrinsic properties or characteristics (taste, odor, color, specific gravity, water solubility, etc.) of the spirits.

SEC. 4. USES NOT PERMITTED.

Under no circumstances shall any samples withdrawn for laboratory analysis or testing (including organoleptic examination) be used for sale or consumption or be furnished to prospective buyers, salesmen, or dealers for advertising or soliciting purposes. Unless the label affixed to the sample container at the time of withdrawal bears the words `Subject to Tax,' samples, withdrawn for laboratory analysis or testing (including organoleptic examination) shall not be used for any of the following purposes:

(1) For the development of blends.

(2) For testing the stability or suitability of newly developed materials used in the manufacture of containers, closures, pipes, hoses, etc.

(3) For furnishing to a purchaser of spirits, if the sample is not to be used as provided in section 3, notwithstanding the spirits have been sold subject to the purchaser's approval.

(4) For use solely as a laboratory standard or `library sample.'

This is not intended to be a complete listing.

SEC. 5. DISPOSITION OF REMNANTS.

Samples withdrawn for the uses described in section 3 should be kept in a place of security. Remnants of such samples, if they are desired for use as laboratory specimens or in further analysis or testing, should likewise be safeguarded. When no longer needed as specimens or samples, such remnants should be disposed of by one or more of the methods listed below and no other:

(1) Complete destruction by pouring into a sewer or by some other equally effective means.

(2) Pouring into vessels in a distilling system on distillery premises under the supervision of a storekeeper-gauger.

(3) Return to the bonded wine cellar for use in the production of wine (where the remnants are of samples of wine spirits withdrawn from a bonded wine cellar).

SEC. 6. EXISTING PROCEDURE.

Prompt correction should be made of any procedure or instruction in conflict with the provisions of this Revenue Procedure.

SEC. 7. INQUIRIES.

Inquiries in regard to this Revenue Procedure should refer to the number thereof and should be directed to the Assistant Regional Commissioner, Alcohol and Tobacco Tax.

SEC. 8. EFFECTIVE DATE.

This Revenue Procedure shall be effective May 4, 1956.