Rev. Proc. 59-23

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to advise proprietors of industrial alcohol bonded warehouses, internal revenue bonded warehouses, denaturing plants, and distillery denaturing bonded warehouses about the requirements of regulations proposed to be issued under Part 201 as they relate to the status of distilled spirits on the proprietor's premises on July 1, 1959.

SEC. 2. BACKGROUND.

The provisions of the Excise Tax Technical Changes Act of 1958, Public Law 85-859, C.B. 1958-3, 92, which become effective July 1, 1959, will require proprietors to qualify their premises as a distilled spirits plant if they are to continue operations on and after that date. Thus, the qualified status of the proprietor's present premises will terminate June 30, 1959, and it will be necessary to formally effect the transfer to the proprietor's distilled spirits plant as of July 1, 1959, of the distilled spirits on, and in transit to, the present premises.

SEC. 3. PROCEDURE.

The requirements of the proposed regulations are summarized below.

.01 If an internal revenue bonded warehouse is to be included in the proprietor's distilled spirits plant, he must, before commencing business on July 1, 1959, effect the transfer of all distilled spirits in such warehouse to the distilled spirits plant. This may be done in either of two ways.

1. The proprietor should file with the Government officer at his warehouse a modified Form 236, Transfer of Distilled Spirits In Bond, in triplicate, covering the transfer of all spirits in the internal revenue bonded warehouse to the distilled spirits plant. The modified Form 236 must show all the required information as to the spirits and containers except that (a) the season of production may be shown in lieu of the date of original entry for deposit, (b) the date of receipt in the warehouse need not be shown and (c) Form 1520, Report of Spirits Gauged, and Form 1619, Report of Packages Transferred Between Bonded Warehouses, need not be furnished. Where the space on Form 236 is not sufficient to show all spirits being transferred, supplemental sheets should be attached to Form 236.

2. The proprietor should file a statement in triplicate signed by himself or by his duly authorized agent, in substantially the following form:

I certify that _ _ (Name of proprietor) is the duly qualified proprietor of Distilled Spirits Plant No. _ _ and that such plant is successor to Internal Revenue Bonded Warehouse No. _ _ , qualified to operate on June 30, 1959. I acknowledge that all spirits which were on deposit in said internal revenue bonded warehouse at the close of business June 30, 1959, as reflected by the records required to be maintained in respect thereto under law and regulations in force on such date, are on deposit in bond in Distilled Spirits Plant No. _ _ at the beginning of business on July 1, 1959, and that, pursuant to section 5005(c), I.R.C. _ _ (Name of proprietor) is liable for the tax on such spirits.

In order that a proprietor may have the opportunity to check his records with those maintained by the Government officer, that officer will notify the proprietor of the number of packages and cases in each seasonal account as of April 30, 1959, and May 31, 1959. If he has the opportunity to do so, the Government officer will, prior to June 30, 1959, verify the number of packages and of cases in his seasonal accounts and will advise proprietors, as each seasonal account is verified, of the date of such verification, the identity of the account, and the number of packages (or cases) in the account.

.02 If an industrial alcohol bonded warehouse is to be included in the proprietor's distilled spirits plant, he must, before commencing business on July 1, 1959, file with the Government officer at his warehouse Forms 1440, Report of Alcohol Gauged, in triplicate, covering the transfer of all alcohol in such warehouse to the distilled spirits plant. Separate Forms 1440 should be filed for alcohol in (a) packages, (b) drums, (c) cases, (d) other portable containers, and (e) bulk. These Forms 1440 will be used to establish the Government officer's record of alcohol on deposit at the distilled spirits plant, corresponding to the records now maintained by Government officers of spirits on deposit in internal revenue bonded warehouses.

.03 If a denaturing plant is to be included in the proprietor's distilled spirits plant, he must, before commencing business on July 1, 1959, file with the Government officer at his plant Forms 1440, in triplicate, transferring all of the alcohol, including denatured alcohol, in the denaturing plant to the distilled spirts plant. Separate Forms 1440 must be filed for undenatured alcohol, which must be reported in proof gallons, and denatured alcohol, which must be reported in wine gallons. In reporting denatured alcohol, no separation by formula is required.

.04 If a distillery denaturing bonded warehouse is to be included in the proprietor's distilled spirits plant, he must, before commencing business on July 1, 1959, file with the Government officer at his plant modified Forms 236 covering the transfer of all undenatured rum and denatured rum to the distilled spirits plant. Separate Forms 236 should be filed for undenatured rum (report in proof gallons) and denatured rum (report in wine gallons).

.05 If, at the close of business on June 30, 1959, there is a possibility that distilled spirits or alcohol are in transit (including in the case of alcohol, transfers from customs bond) to the proprietor's premises, he must, before commencing business on July 1, 1959, file a Form 236 or a Form 1440, as appropriate, containing a statement substantially as follows:

Application is made herewith for the transfer to the bonded premises of Distilled Spirits Plant No. _ _ of any and all spirits which at the close of business on June 30, 1959, were in transit to _ _ (insert I.R.B.W., I.A.B.W., or D.P., as applicable) _ _ (No. and State) under the provisions of internal revenue law and regulations.

This statement will cover only the distilled spirits and alcohol actually in transit at the close of business June 30, 1959.

.06 Form 236 or Form 1440 must be executed by the proprietor of the distilled spirits plant which comes into existence on July 1, 1959, and must be filed in triplicate, with the Government officer at the distilled spirits plant.

SEC. 4. INQUIRIES.

Inquiries regarding this Revenue Procedure should refer to the number thereof and be addressed to the office of the Assistant Regional Commissioner, Alcohol and Tobacco Tax.