26 CFR 201.269: Production gauge. Recording losses of spirits from packages in bonded storage. See Rev. Proc. 61-9, page 894. SECTION 5205.-STAMPS 26 CFR 170.1: Scope of subpart. T.D. 65151 TITLE 26-INTERNAL REVENUE, 1954. CHAPTER I, SUBCHAPTER E, PART 170.— MISCELLANEOUS REGULATIONS RELATING TO LIQUOR Miscellaneous amendments DEPARTMENT OF THE TREASURY, OFFICE OF COMMISSIONER OF INTERNAL REVENUE, Washington 25, D.C. To Office and Employees of the Internal Revenue Service and Others Concerned: In order to (1) delete reference to forms made obsolete by revision of other parts of this chapter; (2) to provide for the use of distilled spirits stamps in lieu of the now obsolete wholesale liquor dealer's stamps; and (3) to conform to changes made in Chapter 51, Internal Revenue Code, by the enactment of Public Law 85-859 [C.B. 1958–3, 92], the regulations in subpart A of 26 CFR Part 170, Miscellaneous Regulations Relating to Liquor, are amended as follows: § 170.1 [Amendment] 1. Section 170.1 is amended to read: § 170.1 SCOPE OF SUBPART.-The regulations in this subpart provide for the issuance of stamps to other than proprietors of distilled spirits plants for the restamping of packages of distilled spirits which have been duly stamped, but from which the stamps have been lost or destroyed by unavoidable accident. $170.2 [Amendment] 2. Section 170.2 is amended by striking the Internal Revenue Code number "5010(a)" and inserting in lieu thereof “5205 (e)”. § 170.3 [Amendment] 3. Section 170.3 is amended to read: § 170.3 APPLICATIONS.—Applications for restamping packages of distilled spirits should be made in writing to the assistant regional commissioner, alcohol and tobacco tax, for the region in which the packages to be restamped are situated. The applicant should state in detail the number of packages, description of the contents, the place where the packages are located, the kind of stamps lost or destroyed, and the nature of the applicant's interest in the property. The applicant shall submit with his application a certified copy of the Internal Revenue Service form on which (1) as to a package filled in internal revenue bond, report was made of the gauge for withdrawal of the package from bond; or (2) as to a package filled after tax payment or determination, report was made of the gauge of the package at the time of its filling. 170.6 [Amendment] 4. Section 170.6 is amended by striking "wholesale liquor dealer's" before the word "stamp" in the first sentence and inserting in lieu thereof "distilled spirits." 1 25 F.R. 12732. $ 170.7 [Amendment] 5. Sentence 170.7 is amended by striking "wholesale liquor dealer's" before the word "stamps" and inserting in lieu thereof "distilled spirits." This Treasury Decision shall be effective December 31, 1960. Because this Treasury Decision makes changes only of a technical nature conforming to revisions made in related regulations and does not adversely affect the public, it is found unnecessary to issue this Treasury Decision with notice and public procedure thereon under section 4(a) of the Administrative Procedure Act, approved June 11, 1946, or subject to the effective date limitation of section 4 (c) of that Act. (This Treasury Decision is issued under authority contained in section 7805 of the Internal Revenue Code of 1954 (68A Stat. 917; 26 US.C. 7805).) CHARLES I. Fox, Acting Commissioner of Internal Revenue. Approved December 7, 1960. FRED C. SCRIBNER, JR., Acting Secretary of the Treasury. (Filed by the Division of the Federal Register on December 12, 1960, 8: 48 a.m., and published in the issue of the Federal Register for December 13, 1960, 25 F.R. 12732) SECTION 5206.-CONTAINERS 26 CFR 201.270: Identification of spirits. (Also 201.517.) (Also Part III-B, Section 5(e); 27 CFR 5.21.) Rev. Rul. 61-74 Whisky designate may be transferred in bulk from the production facilities to the storage facilities of the same distilled spirits plant, or any other distilled spirits plant, for packaging. Such transfer may be made without reduction of the whisky designate to not more than 110 degrees of proof and not less than 80 degrees of proof prior to the removal from production facilities. When whisky designate so removed from production facilities is reduced in proof in the storage facilities and there barrelled, it is proper to brand or mark the barrels with the designation to which the spirits would have been entitled under the Distilled Spirits Labeling and Advertising Regulations if they had been reduced in proof and barrelled in the production facilities of the distilled spirits plant. Advice has been requested (1) whether whisky designate may be transferred from the production facilities of a distilled spirits plant to the storage facilities for packaging, and (2) whether such transfer may be made without the reduction of the whisky designate to not more than 110 degrees of proof and not less than 80 degrees of proof prior to transfer from production facilities. The proprietor of a distilled spirits plant produces spirits at such plant, deposits them in receiving tanks on bonded premises, makes the production gauge, transfers the spirits at production proof in bond in tank trucks, tank cars, or barges to a second distilled spirits plant. There the second proprietor deposits the spirits in storage tanks on bonded premises, reduces the spirits to packaging proof conforming to the standard of identity, packages, and stores them for maturing in the bonded warehouse portion of his plant. Section 5206 (c) of the Internal Revenue Code of 1954 provides that containers of distilled spirits (and cases containing bottles or other containers of such spirits) shall be marked, branded, or identified in such manner as the Secretary of the Treasury or his delegate shall by regulations prescribe. Section 201.270 of the Distilled Spirits Plants Regulations provides, in part, that when the proprietor desires to enter spirits into bonded storage for subsequent packaging in wooden packages, he may identify such spirits with the specific designation to which they would have been entitled if drawn into wooden packages, followed by the word "Designate," for example "Bourbon Whisky Designate." Section 201.517 of the regulations provides, in part, that the desig nation as to the kind of spirits to be marked on packages shall be in accordance with the classes and types of spirits set out in the Distilled Spirits Labeling and Advertising Regulations issued under the Federal Alcohol Administration Act. Section 5.21(b) of the Distilled Spirits Labeling and Advertising Regulations specifies, among other conditions, that, to be designated whisky or any type thereof, spirits must have been withdrawn from the cistern room of the distillery at a proof of not more than 110 degrees and not less than 80 degrees. The above cited provision of section 5.21 (b) of the regulations requiring whisky to be withdrawn from the cistern room of the distillery at not more than 110 degrees of proof nor less than 80 degrees of proof was based on section 3287 of the Revised Statutes, which required whisky to be drawn from the receiving cisterns into casks or packages, and on those provisions of Internal Revenue Regulations No. 7, "Concerning the Tax on Distilled Spirits" (under the Revised Statutes), which limited the use of the designation "whisky" to grain distillates withdrawn from the cistern at or below 110 degrees of proof. These provisions of the Revised Statutes and related regulations, and their successor provisions of the Internal Revenue Code and regulations, have been changed by the enactment of the Excise Tax Technical Changes Act of 1958, Public Law 85-859, C.B. 1958-3, 92, and the issuance of the Distilled Spirits Plants Regulations under the 1954 Code, which do not contain the former requirements that whisky be drawn from receiving cisterns into casks and packages. The term "cistern room" as used in section 5.21 (b) of the Distilled Spirits Labeling and Advertising Regulations is therefore construed to mean its equivalent under the Distilled Spirits Plants Regulations, i.e., the production facilities of a distilled spirits plant. See section 201.11 of the Distilled Spirits Plants Regulations. Accordingly, distilled spirits, otherwise eligible to be bottled and labeled as whisky or any type thereof, is not precluded from being so bottled and labeled by reason of the fact that it was reduced in proof and barrelled in the production facilities of a distilled spirits plant. Furthermore, the Distilled Spirits Plants Regulations, as now in effect, permit the bulk transfer of whisky designate from production facilities to storage facilities of the same distilled spirits plant, or any other distilled spirits plant, for packaging, and permit such transfer without reduction of the whisky designate to not more than 110 degrees of proof and not less than 80 degrees of proof prior to the removal from production facilities. When whisky designate so removed from production facilities is reduced in proof in the storage facilities and there barrelled, it would be proper to brand or mark the barrels with the designation to which the spirits would have been entitled under the Distilled Spirits Labeling and Advertising Regulations if they had been reduced, to not more than 110 degrees of proof and not less than 80 degrees of proof, and barrelled in the production facilities. 26 CFR 201.517: Kind of spirits or wine. Transfer and labeling of whisky designate. See Rev. Rul. 61-74, page 801. 26 CFR 201.521: Marks on containers of completely denatured alcohol. Marks on samples of completely denatured alcohol. See Rev. Rul. 61-82, below. 26 CFR 201.523: Caution label. Marks on samples of completely denatured alcohol. See Rev. Rul. 61-82, below. 26 CFR 201.607: Label. (Also 201.521, 201.523.) Rev. Rul. 61-82 Sample containers of completely denatured alcohol withdrawn from the premises of a distilled spirits plant are not subject to the provisions of section 201.607 of the Distilled Spirits Plants Regulations. Advice has been requested whether samples of completely denatured alcohol, withdrawn from the premises of a distilled spirits plant, should be marked in accordance with the provisions of section 201.607 of the Distilled Spirits Plants Regulations. Section 201.607 of the regulations provides, in part, as follows: Each sample of denatured spirits withdrawn from the premises of the distilled spirits plant shall be labeled as a sample and shall show the name, address, and plant number of the proprietor, the name and address of the person to whom sent, the words "Specially Denatured Spirits" or "Specially Denatured Alcohol", followed by the formula number and the quantity. The provisions of section 201.607 and other sections of the regulations relating to samples of distilled spirits provide for an expedient means of classification and withdrawal of spirits from bonded premises which otherwise would be subject to taxing or permit restrictions. Completely denatured alcohol is not subjected to all of the stringent limitations imposed as to the withdrawal and use of other classifications of distilled spirits. 601301-61-52 Accordingly, the provisions of section 201.607 of the regulations do not apply to samples of completely denatured alcohol withdrawn from the premises of a distilled spirits plant. However, containers of completely denatured alcohol should be marked in accordance with the provisions of sections 201.521 and 201.523 of the regulations, as applicable. SECTION 5207.-RECORDS AND REPORTS 26 CFR 201.625: Daily taxpaid storeroom record. (Also 201.633.) Rev. Rul. 61-38 Proprietors of distilled spirits plants who, after bottling or repacking taxpaid spirits, remove them from the bottling premises to the general premises, or to contiguous premises, for storage for sale are operating taxpaid storerooms and must keep records for such storerooms, as prescribed in the Distilled Spirits Plants Regulations. Various questions have been raised concerning the operation of a taxpaid storeroom in connection with a distilled spirits plant and the proper records to be maintained by the proprietor of the plant with respect thereto. Section 5207 (a) (6) of the Internal Revenue Code of 1954 provides that every distiller, every bonded warehouseman, every rectifier, every bottler shall keep records in such form and manner as the Secretary of the Treasury or his delegate shall by regulations prescribe of the kind and quantity of distilled spirits removed from bonded premises or bottling premises, as the case may be, and from any taxpaid storeroom operated in connection therewith, and the purpose for which removed. Sections 201.625 and 201.633 (d) of the Distilled Spirits Plants Regulations, each proprietor who operates a taxpaid storeroom in connections with, and contiguous to, adjacent to, in the immediate vicinity of, or on the premises of, his plant, or who operates storage premises at another location at or from which distilled spirits are not sold at wholesale, is required to maintain daily taxpaid storeroom records and to submit a monthly report on Form 338, Wholesale Liquor Dealer's Monthly Report. A taxpaid storeroom is any room or area, except rooms or areas which are within and a part of the bottling premises, in which the proprietor of a distilled spirits plant stores taxpaid or tax-determined distilled spirits or wines in connection with the operation of the distilled spirits plant. A taxpaid storeroom may be on the general premises of a distilled spirits plant, adjacent to the plant, or located completely off the plant premises. The following questions and answers illustrate the application of the above definition of a taxpaid storeroom and deal with the proper records to be maintained in its operation: Question 1. Is the proprietor of a distilled spirits plant operating a taxpaid storeroom when he receives spirits on his bottling premises only for rectification and bottling and, after such operations removes the spirits for direct shipment to other persons? Answer. A proprietor of a distilled spirits plant who receives spirits on his bottling premises for rectification or bottling only and, |