APPROVAL AND SUBMISSION OF CLAIMS

§ 196.70 Action by district director of internal revenue.

The district director of internal revenue will immediately examine the claim for drawback on Form 1610, received from the district director of customs (§ 196.69), and if satisfied that the claim is a valid one, he will endorse his approval thereon and forward it with the special tax stamps attached, to the regional director (compliance) of the region in which the claimant is located.

(68A Stat. 618; 26 U.S.C. 5106)

[20 FR 6120, Aug. 23, 1955, as amended by T.D. 7005, 34 FR 2249, Feb. 15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]

§ 196.71 Action by regional director (compliance).

If the regional director (compliance) finds that the claim is in order, he will approve the claim. If the claim is disallowed in whole or in part, the regional director (compliance) will so notify the claimant and state the reasons therefor.

(68A Stat. 618; 26 U.S.C. 5106)

[20 FR 6120; Aug. 23, 1955. Redesignated at 40 FR 16835, Apr. 15, 1975]

§§ 196.42 to 196.47. Manufacturers and vendors of distilling apparatus for purposes other than for distilling shall maintain at their premises a record showing all stills manufactured, received, and removed or otherwise disposed of. Such record shall show the name and address of the purchaser and the purpose for which each still is to be used. Such records will be kept available for a period of 2 years for inspection by ATF officers. At the close of each month, and not later than 10 days thereafter, the manufacturer or vendor shall submit a report to the regional director (compliance) of the region in which his premises are located showing the number of stills on hand at the beginning of the month, the number received, the number disposed of, the number on hand at the end of the month, and as to each such still removed, the name and address of the purchaser and the type, capacity, and kind. Each report shall be signed by the manufacturer or vendor or his authorized agent and immediately above the signature there shall appear the following statement, "I declare under the penalties of perjury that this report has been examined by me and to the best of my knowledge and belief is a true and correct report." Upon application, in duplicate, by the manufacturer or vendor, the regional director (compliance) may waive the requirement for the submission of such report when he finds that such waiver will not jeopardize the revenue. Such waiver shall terminate upon notification by the regional director (compliance) to the manufacturer or vendor.

(Approved by the Office of Management and Budget under control number 15120341)

(26 U.S.C. 7805 (68A Stat. 917), 27 US.C. 205 (49 Stat. 981 as amended), 18 U.S.C. 926 (82 Stat. 959), and sec. 38, Arms Export Control Act (22 U.S.C. 2778, 90 Stat. 744))

[T.D. 7130, 36 FR 12853, July 8, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by T.D. ATF-48, 43 FR 13532, Mar. 31, 1978; T.D. ATF-172, 49 FR 14942, Apr. 16, 1984]

§ 196.81 Removal for exportation.

Distilling apparatus intended for use for purposes other than for distilling,

marked and branded as required by § 196.61, may be removed without payment of tax, for exportation or transfer to a foreign-trade zone by the manufacturer or dealer.

[20 FR 6120, Aug. 23, 1955, as amended by T.D. 6393, 24 FR 5299, June 30, 1959; T.D. 7130, 36 FR 12853, July 8, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975]

§ 196.82 Bill of lading required.

When any distilling apparatus is removed for exportation or for deposit in a foreign-trade zone without payment of tax, the vendor must obtain a copy of the bill of lading covering exportation or consignment to a foreigntrade zone, as the case may be. Such bill of lading must be kept available for a period of not less than 2 years for inspection by ATF officers.

(Approved by the Office of Management and Budget under control number 15120341)

[T.D. 6393, 24 FR 5299, June 30, 1959. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by T.D. ATF-172, 49 FR 14942, Apr. 16, 1984]

ADJUSTMENT OR REFUND OF SPECIAL TAX

197.55 Change to higher rate.

197.56 Change to lower rate.

197.57 Absence of liability, refund of spe cial tax.

197.58 Filing of claims.

197.59 Time limit for filing claim.

Subpart E-Bonds and Consents of Sureties

197.65

General.

197.66 Corporate surety.

197.67 Filing of powers of attorney.

197.68 Deposit of collateral.

197.69 Consents of surety.

197.70 Approval required.

197.71 Authority to approve.

197.72 Additional or strengthening bonds.

197.73 New or superseding bonds.

197.75

TERMINATION OF BONDS

General.

197.76 Notice by surety of termination bond.

197.77 Extent of release of surety from ability under bond.

197.79 Notice of termination. 197.80 Release of collateral.

Subpart F-Formulas and Samples

197.95 Products requiring formulas. 197.96 Products not requiring formulas. 197.97 Statement of process. 197.98 Samples.

back; claims; formulas and samples; losses; and records and reports of distilled spirits received and used in the manufacture of nonbeverage products.

[T.D. 6670, 28 FR 9670, Sept. 4, 1963. Redesignated at 40 FR 16835, Apr. 15, 1975]

§ 197.2 Forms prescribed.

(a) The Director is authorized to prescribe all forms, including bonds and records, required by this part. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part.

(b) "Public Use Forms" (ATF Publication 1322.1) is a numerical listing of forms issued or used by the Bureau of Alcohol, Tobacco and Firearms. This publication may be purchased from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402.

(c) Requests for forms should be mailed to the ATF Distribution Center, 3800 South Four Mile Run Drive, Arlington, Virginia 22206.

(5 U.S.C. 552(a); 80 Stat. 383, as amended) [T.D. ATF-92, 46 FR 46917, Sept. 23, 1981] § 197.3 Incorporations by reference.

(a) "The United States Pharmacopeia (Twentieth Revision, Official from July 1, 1980) and The National Formulary (Fifteenth Edition, Official from July 1, 1980)", published together as "The USP and NF Compendia", are incorporated by reference in this part. This incorporation by reference was approved by the Director of the Federal Register. This publication may be inspected at the Office of the Federal Register, Room 8401, 1100 L Street NW., Washington, D.C., and is available from the United States Pharmacopeial Convention, Inc., 12601 Twinbrook Parkway, Rockville, Maryland 20852. (See §§ 197.96 and 197.109; see also § 197.5, Time distilled spirits are used.)

(b) "The Homeopathic Pharmacopoeia of the United States" (Volume I, 8th Edition, 1979) is incorporated by reference in this part. This incorpora

tion by reference was approved by the Director of the Federal Register. This publication may be inspected at the Office of the Federal Register, Room 8401, 1100 L Street NW., Washington, D.C., and is available from the American Institute of Homeopathy, 7297-8H Lee Highway, Falls Church, Virginia 22042. (See §§ 197.96 and 197.109; see also 197.5, Time distilled spirits are used.)

(Pub. L. 89-554, 80 Stat. 383, as amended (5 U.S.C. 552(a)))

[T.D. ATF-92, 46 FR 46917, Sept. 23, 1981]

Subpart B-Definitions

§ 197.5 Meaning of terms.

As used in this part, unless the context otherwise requires, terms shall have the meaning ascribed in this subpart.

ATF officer. An officer or employee of the Bureau of Alcohol, Tobacco and Firearms (ATF) authorized to perform any function relating to the administration or enforcement of this part.

Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the Department of the Treasury, Washington, D.C.

Director of the service center. "Director of the service center" shall mean the Director, Internal Revenue Service Center, in each of the internal revenue regions.

Distilled spirits. Distilled spirits shall mean that substance known as ethyl alcohol, ethanol, spirits, or spirits of wine in any form (including all dilutions and mixtures thereof, from whatever source or by whatever process produced), which are fully taxpaid or tax-determined at the distilled spirits rate.

Director of the service center. The Director, Internal Revenue Service Center, in each of the internal revenue regions.

District director or district director of internal revenue. The Director, Internal Revenue Service, in any of the internal revenue districts.

Filed. Subject to the provisions of 26 CFR 301.7502 through 301.7503-1, a claim for drawback shall be deemed to have been "filed" when it is delivered to the office of the proper regional di

rector (compliance), and by that office received.

Intermediate products. Products con taining distilled spirits which are not subject to drawback until used in a nonbeverage product eligible for draw back.

Nonbeverage products. Medicines medicinal preparations, food products flavors, or flavoring extracts, in the manufacture or production of which distilled spirits are used under the pro visions of 26 U.S.C. 5131 through 5134 and this part, and which are unfit fo use for beverage purposes.

Regional director (compliance). The principal ATF regional official respon sible for administering regulations ir this part.

Tax year. The period which begin July 1 and ends on the following Jun 30.

Time distilled spirits are used. The "time" at which distilled spirits shal be deemed to have been used is wher the product contains the ingredient called for by an approved formula, o formulas prescribed by the United States Pharmacopoeia, the Nationa Formulary, or the Homeopathic Phar macopoeia of the United States, as the case may be.

Total annual withdrawals. The tota quantity of distilled spirits (proof gal lons), which are used in the manufac ture or production of nonbeverage products during a year.

U.S.C. The United States Code.

Used. Distilled spirits shall be deemed to have been "used" in the manufacture of a product under this part, when such spirits are either con sumed in such manufacture or are in corporated in the product; except that spirits lost by causes such as spillage leakage, breakage, or theft, prior to o during the process of manufacture shall not be deemed to be consumed in such manufacture.

Year. "Year" shall mean the period which begins July 1 and ends on the following June 30.

[T.D. ATF-48, 43 FR 13543, Mar. 31, 1978 44 FR 55845, Sept. 28, 1979, as amended by T.D. ATF-62, 44 FR 71695, Dec. 11, 1979]

Subpart C-Special Tax

§ 197.25 Payment and rates of special tax. Each person who uses distilled spirits in the manufacture or production of medicines, medicinal preparations, food products, flavors, or flavoring extracts which are unfit for beverage purposes, in order to be eligible for drawback on the distilled spirits so used, must pay special tax at the rate of $25 per annum for total annual use not exceeding 25 proof gallons of distilled spirits; $50 per annum for total annual use not exceeding 50 proof gallons; or $100 per annum for total annual use of more than 50 proof gallons. Where a claim is filed in the first quarter of a tax year, covering distilled spirits used during the preceding tax year, and special tax has not been paid for the preceding tax year, special tax for such preceding tax year must be paid in the appropriate amount. Special tax, based upon estimated use, may be paid in advance of actual use. Adjustments of the special tax where improperly paid will be made in accordance with §§ 197.55 and 197.56. The manufacturer is not required to pay the special tax if he does not claim drawback on the distilled spirits used by him.

[T.D. 6670, 28 FR 9670, Sept. 4, 1963. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by T.D. ATF-48, 44 FR 55845, Sept. 28, 1979]

§ 197.26 Special tax for each place.

A separate special tax must be paid for each place at which distilled spirits are used in the manufacture or production of nonbeverage products if a claim is filed for drawback of tax on distilled spirits so used at each such place.

§ 197.27 Time for payment of special tax.

The special tax shall be paid before a claimant is eligible for drawback. Regardless of the portion of a tax year covered by a claim, the full annual special tax of $25, $50, or $100, as the case may be, shall be paid.

[T.D. 6670, 28 FR 9670, Sept. 4, 1963. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by T.D. ATF-48, 44 FR 55845, Sept. 28, 1979]

§ 197.28 Filing of return and payment of special tax.

(a) General. Returns shall be filed on IRS Form 11, with payment of tax, with the director of the service center serving the internal revenue district in which the place of manufacture is located.

(b) Multiple locations. If a taxpayer is subject to special (occupational) tax at two or more locations, he shall file one special tax return Form 11 (prepared in the manner prescribed in § 197.29), with payment of tax to cover all such locations. The return with tax shall be filed with the director of the service center serving the internal revenue district in which the taxpayer's principal place of business (or principal office in the case of a corporate taxpayer) is located. In addition, he shall prepare, in duplicate, a list identified with his name, address, employer identification number, class of tax, and period covered by his return. The list shall show, by States, the name (and trade name, if any) and address of each location (including the taxpayer's principal place of business, or principal office, if subject to special tax) for which special tax is being paid. The original of the list shall be attached to the Form 11, as a part of his return, and the copy shall be retained by the taxpayer for a period of not less than 2 years.

[T.D. ATF-70, 45 FR 33980, May 21, 1980] EXECUTION OF FORM 11

§ 197.29 General.

Special tax returns, Form 11, may be procured from the director of the service center or from any district director and shall disclose, in the spaces provided, the following:

(a) The true name of the taxpayer, which may be followed by the words "trading as" and any trade name under which the business is conducted. (b) The employer identification number (see §§ 197.29a through 197.29c).

(c) The exact location of the place of business, as by name and number of building or street, and where these do not exist, some particularization in addition to the post office address;