[Code of Federal Regulations]
[Title 27, Volume 1, Parts 1 to 199]
[Revised as of April 1, 2000]
From the U.S. Government Printing Office via GPO Access
[CITE: 27CFR19]

[Page 278-416]
 
            TITLE 27--ALCOHOL, TOBACCO PRODUCTS AND FIREARMS
 
 CHAPTER I--BUREAU OF ALCOHOL, TOBACCO AND FIREARMS, DEPARTMENT OF THE 
                                TREASURY
 
PART 19--DISTILLED SPIRITS PLANTS

                            Subpart A--Scope

Sec.
19.1  General.
19.2  Territorial extent.
19.3  Related regulations.

                         Subpart B--Definitions

19.11  Meaning of terms.

                            Subpart C--Taxes

                             Gallonage Taxes

19.21  Tax.
19.22  Attachment of tax.
19.23  Lien.
19.24  Persons liable for tax.
19.25  Time for tax determination.
19.26  Tax on wine.

                               Assessments

19.31  Production not accounted for.
19.32  Assessment of tax on spirits, denatured spirits, or wines in bond 
          which are lost, destroyed or removed without authorization.

                           Effective Tax Rates

19.34  Computation of effective tax rate.
19.35  Application of effective tax rate (Actual).
19.36  Standard effective tax rate.
19.37  Average effective tax rate.
19.38  Inventory reserve account.

                                 Claims

19.41  Claims on spirits, denatured spirits, articles, or wines lost or 
          destroyed in bond.
19.42  Claims on spirits returned to bonded premises.
19.43  Claims relating to spirits lost after tax determination.
19.44  Execution of claims and supporting documents.
19.45  Claims for credit of tax.
19.46  Adjustments for credited tax.

                Subpart Ca--Special (Occupational) Taxes

19.49  Liability for special tax.
19.50  Rates of special tax.
19.51  Special tax returns.
19.52  Employer identification number.

                           Special Tax Stamps

19.53  Issuance, distribution, and examination of special tax stamps.
19.54  Changes in special tax stamps.

         Subpart D--Administrative and Miscellaneous Provisions

                   Activities Not Subject to This Part

19.57  Recovery and reuse of denatured spirits in manufacturing 
          processes.
19.58  Use of taxpaid distilled spirits to manufacture products unfit 
          for beverage use.

                       Authorities of the Director

19.61  Forms prescribed.
19.62  Alternate methods or procedures.
19.63  Pilot operations.
19.64  [Reserved]
19.65  Experimental distilled spirits plants.
19.66  Application to establish experimental plants.
19.67  Spirits produced in industrial processes.
19.68  Other businesses.
19.70  Exemptions to meet the requirements of National defense.
19.71  Experimental or research operations by scientific institutions 
          and colleges of learning.

            Authorities of the regional director (Compliance)

19.72  Other businesses.
19.73  Emergency variations from requirements.
19.74  Disaster exemptions.
19.75  Assignment of officers and supervision of operations.
19.76  Allowance of remission, abatement, credit or refund of tax.
19.77  Installation of meters, tanks and other apparatus.
19.78  Approval of qualifying documents.
19.79  Discontinuance of storage facilities.

[[Page 279]]

                       Authorities of ATF Officers

19.81  Right of entry and examination.
19.82  Detention of containers.
19.83  Samples for the United States.
19.84  Gauging and measuring equipment.

                    Entry and Examination of Premises

19.86  Furnishing facilities and assistance.

       Gauging of Spirits, Wines or Alcoholic Flavoring Materials

19.91  Gauging.
19.92  When gauges are required.
19.93  Quantity determination of spirits in bond.

          Securing of Conveyances Used for Transporting Spirits

19.96  Securing of conveyances.

            Conveyance of Spirits or Wines on Plant Premises

19.97  Taxpaid spirits or wines on bonded premises.
19.98  Conveyance of untaxpaid spirits or wines within a distilled 
          spirits plant.
19.99  Spirits in customs custody.

                          Penalties of Perjury

19.100  Execution under penalties of perjury.

Subpart E [Reserved]

                       Subpart F--Location and Use

19.131  Restrictions as to location.
19.132  Continuity of premises.
19.133  Use of distilled spirits plant premises.
19.134  Bonded warehouses not on premises qualified for production of 
          spirits.

          Subpart G--Qualification of Distilled Spirits Plants

19.151  General requirements for registration.
19.152  Data for application for registration.
19.153  Statement of physical security.
19.154  Notice of registration.
19.155  Maintenance of registration file.
19.156  Powers of attorney.
19.157  Operating permits.
19.158  Data for application for operating permits.
19.159  Issuance of operating permits.
19.160  Duration of permits.
19.161  Denial of permit.
19.162  Correction of permits.
19.163  Suspension or revocation.
19.164  Rules of practice in permit proceedings.
19.165  Trade names.
19.166  Major equipment.
19.167  Organizational documents.
19.168  Description of plant.
19.169  Registry of stills.
19.170  Statement of production procedure.

                  Changes After Original Qualification

19.180  Application for amended registration.
19.181  Automatic termination of permits.
19.182  Change in name of proprietor.
19.183  Change of trade name.
19.184  Changes in stockholders.
19.185  Changes in officers and directors.
19.186  Change in proprietorship.
19.187  Adoption of formulas.
19.188  Partnerships.
19.189  Change in location.
19.190  Changes in premises.
19.191  Change in operations.
19.192  Change in production procedure.
19.193  Changes in construction or use of buildings and equipment.

                  Operations by Alternating Proprietors

19.201  Procedure for alternating proprietors.

                          Alternate Operations

19.202  Alternate use of premises and equipment for customs purposes.
19.203  Alternation of distilled spirits plant and bonded wine cellar 
          premises.
19.204  Alternation of distilled spirits plant and taxpaid wine bottling 
          house premises.
19.205  Alternate curtailment and extension of bonded premises for use 
          as general premises.
19.206  Curtailment and extension of plant premises for the manufacture 
          of eligible flavors.

                  Permanent Discontinuance of Business

19.211  Notice of permanent discontinuance.

                 Subpart H--Bonds and Consents of Surety

19.231  Filing of operations or unit bonds.
19.232  Additional condition of operations bond.
19.233  Corporate surety.
19.234  Deposit of securities in lieu of corporate surety.
19.235  Consents of surety.
19.236  Filing and execution of powers of attorney.
19.237  Disapproval of bonds or consents of surety.
19.238-19.240  [Reserved]
19.241  Operations bond--distilled spirits plant and adjacent bonded 
          wine cellar.
19.242  Area operations bond.
19.243  Withdrawal bond.
19.244  Unit bond.
19.245  Bonds and penal sums of bonds.
19.246  Strengthening bonds.

                        New or Superseding Bonds

19.247  General.
19.248  New or superseding bond.

[[Page 280]]

                          Termination of Bonds

19.249  Termination of bonds.
19.250  Application of surety for relief from bond.
19.251  Relief of surety from bond.
19.252  Release of pledged securities.

             Subpart I--Construction, Equipment and Security

19.271  Construction of buildings.
19.272  Equipment.
19.273  Tanks.
19.274  Pipelines.
19.275  Continuous distilling system.
19.276  Package scales.
19.277  Measuring devices and proofing instruments.
19.278  Identification of structures, areas, apparatus, and equipment.
19.279  Office facilities.
19.280  Signs.
19.281  Security.
19.282  Breaking Government locks.

                          Subpart J--Production

19.311  Notice by proprietor.
19.312  Receipt of materials.
19.313  Use of materials in production of spirits.
19.314  Removal of fermenting material.
19.315  Removal or destruction of distilling material.
19.316  Distillation.
19.317  Treatment during production.
19.318  Addition of caramel to rum or brandy and addition of oak chips 
          to spirits.
19.319  Production gauge.
19.320  Identification of spirits.
19.321  Entry.
19.322  Distillates containing extraneous substances.

                                 Formula

19.324  Statement of production procedure or Form 5110.38.

                          Chemical By-Products

19.326  Spirits content of chemicals produced.
19.327  Disposition of chemicals.
19.328  Wash water.

                               Inventories

19.329  Production inventories.

                        Subpart K--Redistillation

19.331  General.
19.332  Receipts for redistillation
19.333  Redistillation.

                           Subpart L--Storage

19.341  General.
19.342  Receipt and storage of bulk spirits and wines.
19.343  Addition of oak chips to spirits and addition of caramel to 
          brandy and rum.

                      Filling and Changing Packages

19.344  Filling of packages from tanks.
19.345  Change of packages.

                     Mingling or Blending of Spirits

19.346  Mingling or blending of spirits for further storage.
19.347  Packages dumped for mingling.
19.348  Determining age of mingled spirits.
19.349  Mingled spirits or wines held in tanks.

                               Inventories

19.353  Storage inventories.

Subpart M--Processing Operations Other Than Denaturation and Manufacture 
                               of Articles

19.371  General.

  Receipt and Use of Spirits, Wines, and Alcoholic Flavoring Materials

19.372  Receipt of spirits, wines and alcoholic flavoring materials for 
          processing.
19.373  Use of spirits, wines and alcoholic flavoring materials.
19.374  Manufacture of nonbeverage products, intermediate products or 
          eligible flavors.

                               Obscuration

19.376  Determining obscuration.

                                Formulas

19.378  Formula requirement.

              Bottling, Packaging, and Removal of Products

19.381  Removals from processing.
19.382  Bottling tanks.
19.383  Bottling tank gauge.
19.384  Preparation of bottling or packaging record.
19.385  Labels to agree with contents of tanks and containers.
19.386  Alcohol content and fill.
19.387  Completion of bottling.
19.388  Cases.
19.389  Remnants.
19.390  Filling packages.
19.391  Removal by bulk conveyances or pipelines.
19.392  Rebottling.
19.393  Reclosing and relabeling.
19.394  Bottled-in-bond spirits.
19.395  Labels for export spirits.
19.396  Spirits removed for shipment to Puerto Rico.

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19.397  Spirits not originally intended for export.
19.398  Alcohol.

                                 Records

19.400  Daily summary record of spirits bottled or packaged.

                               Inventories

19.401  Inventories of wines and bulk spirits (except in packages) in 
          processing account.
19.402  Inventories of bottled and packaged spirits.

      Subpart N--Denaturing Operations and Manufacture of Articles

19.451  General.

                              Denaturation

19.452  Formulas.
19.453  Testing of denaturants.
19.454  Gauge of denaturation.
19.455  Dissolving of denaturants.
19.456  Adding denaturants.
19.457  Neutralizing denatured spirits.
19.458  Restoration and redenaturation of recovered denatured spirits 
          and recovered articles.
19.459  Mixing of denatured spirits.
19.460  Conversion of denatured alcohol formulas.
19.461  Receipt and storage of denatured spirits.
19.462  Filling of containers from tanks.
19.463  Containers for denatured spirits.

                               Inventories

19.464  Denatured spirits inventories.

                                Articles

19.471  Manufacture of articles.

                 Subpart O--Spirits From Customs Custody

19.481  General.
19.482  Age and fill date.
19.483  Recording gauge.

                            Imported Spirits

19.484  Marks on containers of imported spirits.

                 Puerto Rican and Virgin Islands Spirits

19.485  Marks on containers of Puerto Rican and Virgin Islands spirits.
19.486  Additional tax on nonbeverage spirits.
19.487  Abatement, remission, credit or refund.

                  Subpart P--Transfers and Withdrawals

                                 General

19.501  Authority to withdraw.
19.502  Withdrawal of spirits on production or filling gauge.
19.503  Determination of tare.

                    Transfer Between Bonded Premises

19.505  Authorized transfers.
19.506  Application to receive spirits in bond.
19.507  Termination of application.
19.508  Consignor premises.
19.509  Reconsignment.
19.510  Consignee premises.

             Withdrawals on Determination and Payment of Tax

19.515  Determination and payment of tax.
19.516  Bond account.
19.517  Gauge for tax determination.
19.518  Imported spirits.
19.519  Methods of tax payment.
19.520  Employer identification number.
19.521  Application for employer identification number.
19.522  Taxes to be collected by returns.
19.523  Time for filing returns.
19.524  Payment of tax by electronic fund transfer.
19.525  Manner of filing returns.
19.526  Removal of spirits on tax determination.

              Withdrawal of Spirits Without Payment of Tax

19.531  Authorized withdrawals without payment of tax.
19.532  Withdrawals of spirits for use in wine production.
19.533  Withdrawal of spirits without payment of tax for experimental or 
          research use.
19.534  Withdrawals of spirits for use in production of nonbeverage wine 
          and nonbeverage wine products.

                    Withdrawal of Spirits Free of Tax

19.536  Authorized withdrawals free of tax.
19.537  Withdrawal of spirits free of tax.
19.538  Withdrawal of spirits by the United States.
19.539  Disposition of excess spirits.
19.540  Removal of denatured spirits and articles.
19.541  Reconsignment.

                     Subpart Q--Losses and Shortages

                                 Losses

19.561  Losses in general.
19.562  Determination of losses in bond.
19.563  Loss of spirits from packages.
19.564  Losses after tax determination.

[[Page 282]]

                                Shortages

19.565  Shortages of bottled distilled spirits.

                     Subpart R--Containers and Marks

                               Containers

19.581  Authorized containers.
19.582  Spirits for nonindustrial use.
19.583  Spirits for industrial use.
19.584  Packages.
19.585  Bulk conveyances.
19.586  Tanks.
19.587  Pipelines.
19.588  Construction of bulk conveyances.
19.589  Restrictions on dispositions of bulk spirits.

                                  Marks

19.592  General.
19.593  Package identification numbers in production and storage.
19.594  Numbering of packages and cases in processing.
19.595  Specifications for marks.
19.596  Marks on packages of spirits filled on bonded premises.
19.597  Kind of spirits.
19.598  [Reserved]
19.599  Change of packages in storage.
19.600  [Reserved]
19.601  Marks on containers of specially denatured spirits.
19.602  Marks on containers of completely denatured alcohol.
19.603  [Reserved]
19.604  Caution label.
19.605  Additional marks on portable containers.
19.606  Marks on bulk conveyances.
19.607  Marks on cases.
19.608  Cases of industrial alcohol.
19.609  [Reserved]
19.610  Obliteration of marks.
19.611  Relabeling and reclosing off bonded premises.
19.612  Authorized abbreviations to identify marks.

             Subpart S--Liquor Bottle and Label Requirements

19.631  Scope of subpart.

                       Liquor Bottle Requirements

19.632  Bottles authorized.
19.633  Distinctive liquor bottles.
19.634  Receipt and storage of liquor bottles.
19.635  Bottles to be used for display purposes.
19.636  Bottles for testing purposes.
19.637  Bottles not constituting approved containers.
19.638  Disposition of stocks of liquor bottles.
19.639  Use and resale of liquor bottles.

                        Bottle Label Requirements

19.641  Certificate of label approval or exemption.
19.642  Statements required on labels under an exemption from label 
          approval.
19.643  Brand name, kind, alcohol content, and State of distillation.
19.644  Net contents.
19.645  Name and address of bottler.
19.646  Age of whisky containing no neutral spirits.
19.647  Age of whisky containing neutral spirits.
19.648  Age of brandy.
19.649  Presence of neutral spirits and coloring, flavoring, and 
          blending materials.
19.650  Country of origin.

                          Subpart T--Closures.

19.661  General.
19.662  Affixing closures.
19.663  Reclosing.

     Subpart U--Return of Spirits to Bonded Premises and Voluntary 
                               Destruction

                                 Returns

19.681  Return of taxpaid spirits to bonded premises.
19.682  Receipt and gauge of returned taxpaid spirits.
19.683  Return of recovered denatured spirits and recovered articles.
19.684  Articles and spirits residues received for redistillation.
19.685  Return of recovered tax-free spirits, and spirits and denatured 
          spirits withdrawn free of tax.
19.686  Return of spirits withdrawn without payment of tax.
19.687  Return of spirits withdrawn for export with benefit of drawback.
19.688  Abandoned spirits.

                          Voluntary Destruction

19.691  Voluntary destruction.

                      Subpart V--Samples of Spirits

19.701  Spirits withdrawn from bonded premises.
19.702  Samples used on bonded premises.
19.703  Taxpayment of samples.
19.704  Labels.

                     Subpart W--Records and Reports

                                 General

19.721  Records.
19.722  Conversion between metric and U.S. units.
19.723  Maintenance and preservation of records.
19.724  Modified forms.
19.725  Photographic copies of records.

[[Page 283]]

19.726  Authorized abbreviations to identify spirits.

                                 Records

19.731  General.
19.732  Details of daily records.

                           Production Account

19.736  Daily production records.

                             Storage Account

19.740  Daily storage records.
19.741  Package summary records.
19.742  Tank record of wine or spirits of less than 190 degrees of 
          proof.
19.743  Tank summary record for spirits of 190 degrees or more of proof.

                           Processing Account

19.746  Processing.
19.747  Records of manufacturing.
19.748  Dump/batch records.
19.749  Bottling and packaging record.
19.750  Records of alcohol content and fill tests.
19.751  Records of finished products.
19.752  Denaturation records.
19.753  Record of article manufacture.

                               Tax Records

19.761  Record of tax determination.
19.762  Daily summary record of tax determinations.
19.763  Record of average effective tax rates.
19.764  Inventory reserve records.
19.765  Standard effective tax rates.

                              Other Records

19.766  Record of samples.
19.767  Record of destruction.
19.768  Gauge record.
19.769  Package gauge record.
19.770  Transfer record.
19.771-19.772  [Reserved]
19.773  Daily record of wholesale liquor dealer and taxpaid storeroom 
          operations.
19.774  Record of inventories.
19.775  Record of securing devices.
19.776  Record of scale tests.
19.777  [Reserved]
19.778  Removal on or after January 1, 1987 of Puerto Rican and Virgin 
          Islands spirits, and rum imported from all other areas.
19.779  Record of shipment of spirits and specially denatured spirits 
          withdrawn free of tax.
19.780  Record of distilled spirits shipped to manufacturers of 
          nonbeverage products.

                     Submission of Forms and Reports

19.791  Submission of transaction forms.
19.792  Reports.

       Subpart X--Production of Vinegar by the Vaporizing Process

                            Scope of Subpart

19.821  Production of vinegar by the vaporizing process.

                         Qualification Documents

19.822  Application.
19.823  Changes after original qualification.
19.824  Notice of permanent discontinuance of business.

                       Construction and Equipment

19.825  Construction and equipment.

                            Plant Operations

19.826  Authorized operations.
19.827  Conduct of operations.
19.828  Removals from the premises.

                                 Records

19.829  Daily records.

                    Administrative and Miscellaneous

19.830  Application of distilled spirits tax.

                Subpart Y--Distilled Spirits for Fuel Use

19.901  Scope of subpart.
19.902  Waiver for alcohold fuel plants.
19.903  Alternate methods or procedures.
19.904  Emergency variations from requirements.
19.905  Taxes.
19.906  Special (occupational) tax.

                               Definitions

19.907  Meaning of terms.

                                 Permits

19.910  Application for permit required.
19.911  Criteria for issuance of permit.
19.912  Small plants.
19.913  Action on applications to establish small plants.
19.914  Medium plants.
19.915  Large plants.
19.916  Organizational documents.
19.917  Powers of attorney.
19.918  Information already on file and supplemental information.

               Changes Affecting Applications and Permits

19.919  Changes affecting applications and permits.
19.920  Automatic termination of permits.
19.921  Change in type of alcohol fuel plant.
19.922  Change in name of proprietor.
19.923  Changes in officers, directors, or principal persons.
19.924  Change in proprietorship.
19.925  Continuing partnerships.
19.926  Change in location.

[[Page 284]]

                          Alternate Operations

19.930  Alternating proprietorship.

                  Permanent Discontinuance of Business

19.945  Notice of permanent discontinuance.

                   Suspension or Revocation of Permits

19.950  Suspension or revocation.

                                  Bonds

19.955  Bonds.
19.956  Amount of bond.
19.957  Instructions to compute bond penal sum.
19.958  Conditions of bond.
19.959  Additional provisions with respect to bonds.

                  Construction, Equipment and Security

19.965  Construction and equipment.
19.966  Security.
19.967  Additional security.

                               Supervision

19.970  Supervision of operations.

                         Accounting for Spirits

19.980  Gauging.
19.981  Inventories.
19.982  Records.
19.983  Spirits rendered unfit for beverage use in the production 
          process.
19.984  Record of spirits received.
19.985  Record of spirits rendered unfit for beverage use.
19.986  Record of dispositions.
19.987  Maintenance and retention of records.
19.988  Reports.

                             Redistillation

19.990  Redistillation of spirits or fuel alcohol received on the plant 
          premises.

                    Uses, Withdrawals, and Transfers

19.995  Use on premises.
19.996  Withdrawal of spirits.
19.997  Withdrawal of fuel alcohol.
19.998  Transfer in bond of spirits.
19.999  Consignor premises.
19.1000  Reconsignment in transit.
19.1001  Consignee premises.
19.1002  Prohibited uses, transfers and withdrawals.

         Materials for Rendering Spirits Unfit for Beverage Use

19.1005  Authorized materials.
19.1006  Other materials.
19.1007  Samples.

                                  Marks

19.1008  Marks.

                   Subpart Z--Paperwork Reduction Act

19.1010  OMB control numbers assigned pursuant to the Paperwork 
          Reduction Act.

    Authority: 19 U.S.C. 81c, 1311; 26 U.S.C. 5001, 5002, 5004-5006, 
5008, 5010, 5041, 5061, 5062, 5066, 5081, 5101, 5111-5113, 5142, 5143, 
5146, 5171-5173, 5175, 5176, 5178-5181, 5201-5204, 5206, 5207, 5211-
5215, 5221-5223, 5231, 5232, 5235, 5236, 5241-5243, 5271, 5273, 5301, 
5311-5313, 5362, 5370, 5373, 5501-5505, 5551-5555, 5559, 5561, 5562, 
5601, 5612, 5682, 6001, 6065, 6109, 6302, 6311, 6676, 6806, 7011, 7510, 
7805; 31 U.S.C. 9301, 9303, 9304, 9306.

    Source: T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, unless otherwise 
noted.

                            Subpart A--Scope

Sec. 19.1  General.

    The regulations in this part relate to the location, construction, 
equipment, arrangement, qualification, and operation (including 
activities incident thereto) of distilled spirits plants.

Sec. 19.2  Territorial extent.

    This part applies to the several States of the United States and the 
District of Columbia.

Sec. 19.3  Related regulations.

    Regulations relating to this part are listed below:

    27 CFR part 1--Basic Permit Requirements Under the Federal Alcohol 
Administration Act.
    27 CFR part 2--Nonindustrial Use of Distilled Spirits and Wine.
    27 CFR part 3--Bulk Sales and Bottling of Distilled Spirits.
    27 CFR part 4--Wine Labeling and Advertising.
    27 CFR part 5--Labeling and Advertising Distilled Spirits.
    27 CFR part 20--Distribution and Use of Denatured Alcohol and Rum.
    27 CFR part 21--Formulas for Denatured Alcohol and Rum.
    27 CFR part 22--Distribution and Use of Tax-Free Alcohol.
    27 CFR part 24--Wine.
    27 CFR part 30--Gauging Manual.
    27 CFR part 170--Miscellaneous Regulations Relating to Liquor.
    27 CFR part 194--Liquor Dealers.
    27 CFR part 197--Drawback on Distilled Spirits Used in Manfacturing 
Nonbeverage Products.
    27 CFR part 200--Rules of Practice in Permit Proceedings.
    27 CFR part 250--Liquors and Articles from Puerto Rico and the 
Virgin Islands.

[[Page 285]]

    27 CFR part 251--Importation of Distilled Spirits, Wine, and Beer.
    27 CFR part 252--Exportation of Liquors.
    31 CFR part 225--Acceptance of Bonds, Notes, or Other Obligations 
Issued or Guaranteed by the United States as Security in Lieu of Surety 
or Sureties on Penal Bonds.

[T.D. ATF-199, 50 FR 9160, Mar. 6, 1985, as amended by T.D. ATF-207, 50 
FR 23681, June 5, 1985; T.D. ATF-299, 55 FR 24989, June 19, 1990]

                         Subpart B--Definitions

Sec. 19.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
terms shall have the meaning ascribed in this section. Words in the 
plural form include the singular, and vice versa, and words indicating 
the masculine gender include the feminine. The terms ``includes'' and 
``including'' do not exclude other things not enumerated which are in 
the same general class.
    Alcoholic flavoring materials. Any nonbeverage product on which 
drawback has been or will be claimed under 26 U.S.C. 5131-5134 or 
flavors imported free of tax which are unfit for beverage purposes. The 
term includes eligible flavors but does not include flavorings or 
flavoring extracts manufactured on the bonded premises of distilled 
spirits plant as an intermediate product.
    Application for registration. The application required under 26 
U.S.C. 5171(c).
    Area supervisor. The supervisory officer of the Bureau of Alcohol, 
Tobacco and Firearms area office.
    Article. A product, containing denatured spirits, which was 
manufactured under 27 CFR part 20 or this part.
    ATF bond. For purposes of this part, ATF bond means the internal 
revenue bond as prescribed in 26 U.S.C. Chapter 51.
    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.
    Bank. Any commercial bank.
    Banking day. Any day during which a bank is open to the public for 
carrying on substantially all its banking functions.
    Basic permit. The document authorizing the person named therein to 
engage in a designated business or activity under the Federal Alcohol 
Administration Act.
    Bonded premises. The premises of a distilled spirits plant, or part 
thereof, as described in the application for registration, on which 
distilled spirits operations defined in 26 U.S.C. 5002 are authorized to 
be conducted.
    Bottler. A proprietor of a distilled spirits plant qualified under 
this part as a processor who bottles distilled spirits.
    Bulk container. Any approved container having a capacity in excess 
of one wine gallon.
    Bulk conveyance. A tank car, tank truck, tank ship, tank barge, or a 
compartment of any such conveyance, or any other container approved by 
the Director for the conveyance of comparable quantities of spirits, 
including denatured spirits, and wines.
    Bulk distilled spirits. The term bulk distilled spirits means 
distilled spirits in a container having a capacity in excess of one 
gallon.
    Business day. Any day, other than a Saturday, Sunday, or a legal 
holiday. (The term legal holiday includes all holidays in the District 
of Columbia and statewide holidays in the particular State in which the 
claim, report, or return, as the case may be, is required to be filed, 
or the act is required to be performed.)
    Carrier. Any person, company, corporation, or organization, 
including a proprietor, owner, consignor, consignee, or bailee, who 
transports distilled spirits, denatured spirits, or wine in any manner 
for himself or others.
    CFR. The Code of Federal Regulations.
    Commercial bank. A bank, whether or not a member of the Federal 
Reserve system, which has access to the Federal Reserve Communications 
System (FRCS) or Fedwire. The ``FRCS'' or ``Fedwire'' is a 
communications network that allows Federal Reserve system member banks 
to effect a transfer of funds for their customers (or other commercial 
banks) to the Treasury Account at the Federal Reserve Bank of New York.
    Container. A receptacle, vessel, or form of bottle, can, package, 
tank or pipeline (where specifically included)

[[Page 286]]

used or capable of being used to contain, store, transfer, convey, 
remove, or withdraw spirits and denatured spirits.
    Denaturant or denaturing material. Any material authorized under 27 
CFR part 21 for addition to spirits in the production of denatured 
spirits.
    Denatured spirits. Spirits to which denaturants have been added as 
provided in 27 CFR part 21.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Director of the service center. A director of an internal revenue 
service center.
    Distilled spirits operations. Any authorized distilling, 
warehousing, or processing operations conducted on the bonded premises 
of a plant qualified under this part.
    Distilling material. Any fermented or other alcoholic substance 
capable of, or intended for use in, the original distillation or other 
original processing of spirits.
    District director. A district director of internal revenue.
    Effective tax rate. The net tax rate after reduction for any credit 
allowable under 26 U.S.C. 5010 for wine and flavor content at which the 
tax imposed on distilled spirits by 26 U.S.C. 5001 or 7652 is paid or 
determined.
    Electronic fund transfer or EFT. Any transfer of funds effected by a 
proprietor's commercial bank, either directly or through a correspondent 
banking relationship, via the Federal Reserve Communications System 
(FRCS) or Fedwire to the Treasury Account at the Federal Reserve Bank of 
New York.
    Eligible flavor. A flavor which:
    (1) Is of a type that is eligible for drawback of tax under 26 
U.S.C. 5134,
    (2) Was not manufactured on the premises of a distilled spirits 
plant, and
    (3) Was not subjected to distillation on distilled spirits plant 
premises such that the flavor does not remain in the finished product.
    Eligible wine. Wine on which tax would be imposed by paragraph (1), 
(2), or (3) of 26 U.S.C. 5041(b) but for its removal to distilled 
spirits plant premises and which has not been subject to distillation at 
a distilled spirits plant after receipt in bond.
    Export or exportation. A severance of goods from the mass of things 
belonging to the United States with the intention of uniting them to the 
mass of things belonging to some foreign country and shall include 
shipments to any possession of the United States. For the purposes of 
this part, shipments to the Commonwealth of Puerto Rico, and to the 
territories of the Virgin Islands, American Samoa, and Guam, shall also 
be treated as exportations.
    Fermenting material. Any material which is to be subjected to a 
process of fermentation to produce distilling material.
    Fiduciary. A guardian, trustee, executor, administrator, receiver, 
conservator, or any person acting in any fiduciary capacity for any 
person.
    Fiscal year. The period October 1 of one calendar year through 
September 30 of the following year.
    Gallon or wine gallon. The liquid measure equivalent to the volume 
of 231 cubic inches.
    In bond. When used with respect to spirits, denatured spirits, 
articles, or wine refers to spirits, denatured spirits, articles, or 
wine possessed under bond to secure the payment of the taxes imposed by 
26 U.S.C. Chapter 51, and on which such taxes have not been determined. 
The term includes such spirits, denatured spirits, articles, or wine on 
the bonded premises of a distilled spirits plant, such spirits, 
denatured spirits, or wines in transit between bonded premises 
(including, in the case of wine, bonded wine cellar premises). 
Additionally, the term refers to spirits in transit from customs custody 
to bonded premises, and spirits withdrawn without payment of tax under 
26 U.S.C. 5214, and with respect to which relief from liability has not 
occurred under the provisions of 26 U.S.C. 5005(e)(2).
    Industrial use. As applied to spirits, shall have the meaning 
ascribed in 27 CFR part 2.
    Intermediate product. Any product manufactured pursuant to an 
approved formula under 27 CFR part 5, not intended for sale as such but 
for use in the manufacture of a distilled spirits product.

[[Page 287]]

    I.R.C. The Internal Revenue Code of 1954, as amended.
    Kind. As applied to spirits, except as provided in Sec. 19.597, kind 
shall mean class and type as prescribed in 27 CFR part 5. As applied to 
wines, kind shall mean the classes and types of wines as prescribed in 
27 CFR part 4.
    Liquor bottle. A bottle made of glass or earthenware, or of other 
suitable material approved by the Food and Drug Administration, which 
has been designed or is intended for use as a container for distilled 
spirits for sale for beverage purposes and which has been determined by 
the Director to protect the revenue adequately.
    Liter. A metric unit of capacity equal to 1,000 cubic centimeters of 
alcoholic beverage, and equivalent to 33.814 fluid ounces. A liter is 
divided into 1,000 milliliters. Milliliter or milliliters may be 
abbreviated as ``ml.''
    Lot identification. The lot identification described in Sec. 19.593.
    Mash, wort, wash. Any fermented material capable of, or intended 
for, use as a distilling material.
    Nonindustrial use. As applied to spirits, shall have the meaning 
ascribed in 27 CFR part 2.
    Operating permit. The document issued pursuant to 26 U.S.C. 5171(d), 
authorizing the person named therein to engage in the business or 
operation described therein.
    Package. A cask or barrel or similar wooden container, or a drum or 
similar metal container.
    Package identification number. The package identification number 
described in Sec. 19.593.
    Person. An individual, trust, estate, partnership, association, 
company, or corporation.
    Plant or distilled spirits plant. An establishment qualified under 
this part for distilling, warehousing, processing or any combination 
thereof.
    Plant number. The number assigned to a distilled spirits plant by 
the regional director (compliance).
    Processor. Except as otherwise provided under 26 U.S.C. 5002(a)(6), 
any person qualified under this part who manufactures, mixes, bottles, 
or otherwise processes distilled spirits or denatured spirits, or 
manufactures any article.
    Proof. The ethyl alcohol content of a liquid at 60 degrees 
Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
    Proof of distillation. The composite proof of the spirits at the 
time the production gauge is made,or, if the spirits had been reduced in 
proof prior to the production gauge, the proof of the spirits prior to 
such reduction, unless the spirits are subsequently redistilled at a 
higher proof than the proof prior to reduction.
    Proof gallon. A gallon of liquid at 60 degrees Fahrenheit which 
contains 50 percent by volume of ethyl alcohol having a specific gravity 
of 0.7939 at 60 degrees Fahrenheit referred to water at 60 degrees 
Fahrenheit as unity, or the alcoholic equivalent thereof.
    Proprietor. The person qualified under this part to operate the 
distilled spirits plant.
    Reconditioning. The dumping of distilled spirits products in bond 
after their bottling or packaging, for purposes other than destruction, 
denaturation, redistillation, or rebottling. The term may include the 
filtration, clarification, stabilization, or reformulation of a product.
    Recovered article. An article containing specially denatured spirits 
salvaged without all of its original ingredients, or an article 
containing completely denatured alcohol salvaged without all of the 
denaturants for completely denatured alcohol, under 27 CFR part 20.
    Region. A Bureau of Alcohol, Tobacco and Firearms region.
    Region director (compliance). The principal regional official 
responsible for administering regulations in this part.
    Season. The period from January 1 through June 30, is the spring 
season, and the period from July 1 through December 31 is the fall 
season.
    Secretary. The Secretary of the Treasury or his delegate.
    Service center. An Internal Revenue Service Center in any of the 
Internal Revenue regions.
    Spirits or distilled spirits. That substance known as ethyl alcohol, 
ethanol, or spirits of wine in any form (including all dilutions and 
mixtures thereof, from whatever source or by

[[Page 288]]

whatever process produced) but not denatured spirits unless specifically 
stated. The term does not include mixtures of distilled spirits and 
wine, bottled at 48 deg. proof or less, if the mixture contains more 
than 50 percent wine on a proof gallon basis.
    Spirits residues. Residues, containing distilled spirits, of a 
manufacturing process related to the production of an article under 27 
CFR part 20.
    Tax-determined or determined. When used with respect to the tax on 
any distilled spirits to be withdrawn from bond on determination of tax, 
shall mean that the taxable quantity of spirits has been established.
    Taxpaid. When used with respect to distilled spirits shall mean that 
all applicable taxes imposed by law in respect of such spirits have been 
determined or paid as provided by law.
    This chapter. Title 27, Code of Federal Regulations, Chapter I (27 
CFR Chapter I).
    Transfer in bond. The removal of spirits, denatured spirits and 
wines from one bonded premises to another bonded premises.
    Treasury Account. The Department of the Treasury's General Account 
at the Federal Reserve Bank of New York.
    Unfinished spirits. Spirits in the production system prior to 
production gauge.
    U.S.C. The United States Code.
    Warehouseman. A proprietor of a distilled spirits plant qualified 
under this part to store bulk distilled spirits.
    Wine spirits. The term ``wine spirits'' means spirits authorized for 
use in wine production by 26 U.S.C. 5373.

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9160, Mar. 6, 1985; T.D. ATF-206, 50 FR 23951, June 7, 1985; T.D. 
ATF-230, 51 FR 21748, June 16, 1986; T.D. ATF-297, 55 FR 18061, Apr. 30, 
1990; T.D. ATF-398, 63 FR 44783, Aug. 21, 1998]

                            Subpart C--Taxes

                             Gallonage Taxes

Sec. 19.21  Tax.

    (a) A tax is imposed by 26 U.S.C. 5001 and 7652 on all spirits 
produced in, imported into or brought into the United States at the rate 
prescribed in section 5001 on each proof gallon and a proportionate tax 
at a like rate on all fractional parts of a proof gallon. Wines 
containing more than 24 percent of alcohol by volume are taxed as 
spirits. All products of distillation, by whatever name known, which 
contain spirits, on which the tax imposed by law has not been paid, and 
any alcoholic ingredient added to such products, are considered and 
taxed as spirits.
    (b) A credit against the tax imposed on distilled spirits by 26 
U.S.C. 5001 or 7652 is allowable under 26 U.S.C. 5010 on each proof 
gallon of alcohol derived from eligible wine or from eligible flavors 
which do not exceed 2\1/2\ percent of the finished product on a proof 
gallon basis. The credit is allowable at the time the tax is payable as 
if it constituted a reduction in the rate of tax.
    (c) Where credit against the tax is desired, the person liable for 
the tax shall establish an effective tax rate in accordance with 
Sec. 19.34. The effective tax rate established will be applied to each 
withdrawal or other taxable disposition of the distilled spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001); 
Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010); Act 
of August 16, 1954, Pub. L. 591, 68A Stat. 907, as amended (26 U.S.C. 
7652)).

[T.D. ATF-297, 55 FR 18061, Apr. 30, 1990]

Sec. 19.22  Attachment of tax.

    Under 26 U.S.C. 5001(b), the tax attaches to spirits as soon as the 
substance comes into existence as such, whether it be subsequently 
separated as pure or impure spirits, or be immediately, or at any 
subsequent time, transferred into any other substance, either in the 
process of original production, or by any subsequent process.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001))

Sec. 19.23  Lien.

    Under 26 U.S.C. 5004, the tax becomes a first lien on the spirits 
from the time the spirits come into existence as such. The conditions 
under which the first lien shall be terminated are described in 26 
U.S.C. 5004.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1317, as amended (26 U.S.C. 5004))


[[Page 289]]



[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]

Sec. 19.24  Persons liable for tax.

    (a) Distilling. 26 U.S.C. 5005 provides that the distiller of 
spirits is liable for the tax and that each proprietor or possessor of, 
and person in any manner interested in the use of, any still, distilling 
apparatus, or distillery, shall be jointly and severally liable for the 
tax on distilled spirits produced. However, a person, not an officer or 
director of a corporate proprietor, owning or having the right of 
control of not more than 10 percent of any class of stock of that 
proprietor, is not liable by reason of the stock ownership or control. 
Persons transferring spirits in bond so liable for the tax are relieved 
of liability if
    (1) The proprietors of transferring and receiving premises are 
independent of each other and neither has a proprietary interest, 
directly or indirectly, in the business of the other, and
    (2) No person so liable for the tax on the spirits transferred 
retains any interest in the spirits.
    (b) Storage on bonded premises. 26 U.S.C. 5005(c) provides that each 
person operating bonded premises shall be liable for the tax on all 
spirits while the spirits are stored on the premises, and on all spirits 
which are in transit to the premises from the time of removal from the 
transferor's bonded premises, pursuant to an approved application. 
Liability for the tax continues until the spirits are transferred or 
withdrawn from bonded premises as authorized by law, or until the 
liability for tax is relieved under the provisions of 26 U.S.C. 5008(a). 
Claims for relief from liability for spirits lost are provided for in 
Sec. 19.41. Voluntary destruction of spirits in bond is provided for in 
subpart U of this part.
    (c) Withdrawals without payment of tax. Under 26 U.S.C. 5005(e), any 
person who withdraws spirits from the bonded premises of a plant without 
payment of tax, as provided in 26 U.S.C. 5214, shall be liable for the 
tax on the spirits from the time of withdrawal. The person shall be 
relieved of any liability at the time the spirits are exported, 
deposited in a foreign-trade zone, used in production of wine, deposited 
in a customs bonded warehouse, laden as supplies upon or used in the 
maintenance or repair of certain vessels or aircraft, or used for 
certain research, development or testing, as provided by law.
    (d) Withdrawals free of tax. Persons liable for tax under paragraph 
(a) of this section, are relieved of the liability on spirits withdrawn 
from bonded premises free of tax under this part, at the time the 
spirits are withdrawn.
    (e) Withdrawn from customs custody without payment of tax. 26 U.S.C. 
5232(a) provides that when imported distilled spirits in bulk containers 
are withdrawn from customs custody and transferred to the bonded 
premises of a distilled spirits plant without payment of the tax imposed 
on imported distilled spirits by 26 U.S.C. 5001, the person operating 
the bonded premises of the distilled spirits plant to which spirits are 
transferred shall become liable for the tax on the spirits upon their 
release from customs custody, and the importer shall thereupon be 
relieved of liability for the tax.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1318, as amended (26 U.S.C. 5005); 
sec. 3, Pub. L. 90-630, 82 Stat. 1328, as amended (26 U.S.C. 5232); sec. 
3, Pub. L. 91-659, 84 Stat. 1965, as amended (26 U.S.C. 5066))

Sec. 19.25  Time for tax determination.

    Except as otherwise provided in this part, the tax on spirits shall 
be determined when the spirits are withdrawn from bond. The tax on 
spirits which are to be withdrawn from bonded premises shall be 
determined upon completion of the gauge for determination of tax and 
before withdrawal from bonded premises.


(Sec. 201, Pub. L. 85-859, 72 Stat 1320, as amended (26 U.S.C. 5006))

Sec. 19.26  Tax on wine.

    (a) Imposition of tax. A tax is imposed by 26 U.S.C. 5041 or 7652 on 
wine (including imitation, substandard, or artificial wine, and 
compounds sold as wine) produced in or imported or brought into the 
United States. Proprietors of distilled spirits plants may become liable 
for wine taxes under 26 U.S.C. 5362(b)(3) in connection with wine 
transferred in bond to a distilled spirits plant. Wine may not be 
removed

[[Page 290]]

from the bonded premises of a distilled spirits plant for consumption or 
sale as wine.
    (b) Liability for tax. Except as otherwise provided by law, the 
liability for tax on wine transferred in bond from a bonded wine cellar 
to a distilled spirits plant, or transferred in bond between distilled 
spirits plants, will continue until the wine is used in a distilled 
spirits product.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as amended, 1380, as amended 
(26 U.S.C. 5041, 5362))

[T.D. ATF-297, 55 FR 18062, Apr. 30, 1990; 55 FR 23634, June 11, 1990]

                               Assessments

Sec. 19.31  Production not accounted for.

    Where the regional director (compliance) finds that a distiller has 
not accounted for all spirits produced by him, assessment shall be made 
for the tax on the difference between the quantity reported and the 
quantity found to have been actually produced.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended (26 U.S.C. 5006))

Sec. 19.32  Assessment of tax on spirits, denatured spirits, or wines in 
          bond which are lost, destroyed or removed without 
          authorization.

    When spirits, denatured spirits, or wines in bond are lost or 
destroyed (except spirits, denatured spirits, or wines on which the tax 
is not collectible by reason of the provisions of 26 U.S.C. 5008 (a) or 
(d) or 26 U.S.C. 5370, as applicable) and the proprietor or other person 
liable for the tax on the spirits, denatured spirits, or wines fails to 
file a claim for remission as provided in Sec. 19.41(a) or when the 
claim is denied, the tax shall be assessed. In any case where spirits, 
denatured spirits, or wines in bond are removed from bonded premises 
other than as authorized by law, the tax shall be assessed. In the case 
of losses under circumstances described in 26 U.S.C. 5006(b) with 
respect to packages of spirits or denatured spirits on bonded premises, 
the tax shall be assessed if the tax is not paid upon the demand of the 
regional director (compliance).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended, 1323, as amended, 
1381, as amended (26 U.S.C. 5006, 5008, 5370))

                           Effective Tax Rates

    Source: Sections 19.34 through 19.38 added by T.D. ATF-297, 55 FR 
18062, Apr. 30, 1990, unless otherwise noted.

Sec. 19.34  Computation of effective tax rate.

    (a) The proprietor shall compute the effective tax rate for 
distilled spirits containing eligible wine or eligible flavors as the 
ratio of the numerator and denominator as follows:
    (1) The numerator will be the sum of:
    (i) The proof gallons of all distilled spirits used in the product 
(exclusive of distilled spirits derived from eligible flavors), 
multiplied by the tax rate prescribed by 26 U.S.C. 5001;
    (ii) The wine gallons of each eligible wine used in the product, 
multiplied by the tax rate prescribed by 26 U.S.C. 5041(b)(1), (2), or 
(3), which would be imposed on the wine but for its removal to bonded 
premises; and
    (iii) The proof gallons of all distilled spirits derived from 
eligible flavors used in the product, multiplied by the tax rate 
prescribed by 26 U.S.C. 5001, but only to the extent that such distilled 
spirits exceed 2\1/2\% of the denominator prescribed in paragraph (a)(2) 
of this section.
    (2) The denominator will be the sum of:
    (i) The proof gallons of all distilled spirits used in the product, 
including distilled spirits derived from eligible flavors; and
    (ii) The wine gallons of each eligible wine used in the product, 
multiplied by twice the percentage of alcohol by volume of each, divided 
by 100.
    (b) In determining the effective tax rate, quantities of distilled 
spirits, eligible wine, and eligible flavors will be expressed to the 
nearest tenth of a proof gallon. The effective tax rate may be rounded 
to as many decimal places as the proprietor deems appropriate, provided 
that, such rate is expressed no less exactly than the rate rounded to 
the nearest whole cent, and the effective tax rates for all products 
will be consistently expressed to the same number of decimal places. In 
such

[[Page 291]]

case, if the number is less than five it will be dropped; if it is five 
or over, a unit will be added.
    (c) The following is an example of the use of the formula.

                              BATCH RECORD

Distilled spirits.........................  2249.1 proof gallons.
Eligible wine (14% alcohol by volume).....  2265.0 wine gallons.
Eligible wine (19% alcohol by volume).....  1020.0 wine gallons.
Eligible flavors..........................  100.9 proof gallons.




    2249.1($13.50)+2265.0($1.07)+1020($1.57)+16.6 \1\ ($13.50)
------------------------------------------------------------------   =
             2249.1+100.9+(2265.0 x .28)+(1020 x .38)
------------------------------------------------------------------------




              $30,362.85+$2,423.55+$1,601.40+$224.10
------------------------------------------------------------------   =
                       2,350.0+634.2+387.6
------------------------------------------------------------------------




                                        $34,611.90
                                     ----------------  =    $10.27, the effective tax
                                          3,371.8                     rate.
----------------------------------------------------------------------------------------------------------------

\1\ Proof gallons by which distilled spirits derived from eligible flavors exceed 2\1/2\%) of the total proof
  gallons in the batch (100.9-(2\1/2\%) x 3,371.8=16.6).

(Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF-297, 55 FR 18062, Apr. 30, 1990, as amended by T.D. ATF-307, 
52736, Dec. 21, 1990]

Sec. 19.35  Application of effective tax rate (Actual).

    Any proprietor who does not apply effective tax rates to taxable 
removals in accordance with Sec. 19.36, 19.37 or 19.38 shall establish 
an effective tax rate for each batch of distilled spirits in the 
processing account on which credit against tax is desired for alcohol 
derived from eligible wine or eligible flavors. The effective tax rate 
will be computed in accordance with Sec. 19.34 and will be recorded on 
the dump or batch record for the product, as required by Sec. 19.748. 
The serial numbers of the cases removed at such rate shall be recorded 
on the record of tax determination prescribed in Sec. 19.761 or other 
related record available for examination by any ATF officer.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201, Pub. 
L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201); Sec 6, Pub. L. 
96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

Sec. 19.36  Standard effective tax rate.

    (a) The proprietor may establish a permanent standard effective tax 
rate for any eligible distilled spirits product based on the least 
quantity and the lowest alcohol content of eligible wine or eligible 
flavors used in the manufacture of the product. The permanent standard 
effective tax rate must equal the highest tax rate applicable to the 
product. The proprietor shall maintain a permanent record of the 
standard effective tax rate established for each product in accordance 
with Sec. 19.765. Whenever the proprietor manufactures a batch of the 
product with a lesser quantity or lower alcohol content of eligible wine 
or eligible flavor, he shall keep the cased goods segregated from other 
completed cases of the same product and shall tax determine the product 
in accordance with Sec. 19.35.
    (b) If the regional director (compliance) finds that the use of this 
procedure jeopardizes the revenue or causes administrative difficulty, 
the proprietor shall discontinue the use of the procedure.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201, Pub. 
L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201); Sec. 6, Pub. L. 
96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

Sec. 19.37  Average effective tax rate.

    (a) The proprietor may establish an average effective tax rate for 
any eligible distilled spirits product based on

[[Page 292]]

the total proof gallons in all batches of the same composition which 
have been produced during the preceding 6-month period and which have 
been or will be bottled or packaged, in whole or in part, for domestic 
consumption. At the beginning of each month, the proprietor shall 
recompute the average effective tax rate so as to include only the 
immediately preceding 6-month period. The average effective tax rate 
established for a product will be shown in the record of average 
effective tax rates prescribed in Sec. 19.763.
    (b) If the regional director (compliance) finds that the use of this 
procedure jeopardizes the revenue or causes administrative difficulty, 
the proprietor shall discontinue the use of this procedure.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201, Pub. 
L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201); Sec. 6, Pub. L. 
96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

Sec. 19.38  Inventory reserve account.

    (a) The proprietor may establish an inventory reserve account for 
any eligible distilled spirits product by maintaining an inventory 
reserve record as prescribed by 19.764. The effective tax rate applied 
to each removal or other disposition will be the effective tax rate 
recorded on the inventory reserve record from which the removal or other 
disposition is depleted.
    (b) If the regional director (compliance) finds that the use of this 
procedure jeopardizes the revenue or causes administrative difficulty, 
the proprietor shall discontinue the use of this procedure.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201, Pub. 
L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201); Sec. 6, Pub. L. 
96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

                                 Claims

Sec. 19.41  Claims on spirits, denatured spirits, articles, or wines 
          lost or destroyed in bond.

    (a) Claims for remission. All claims for remission of tax required 
by this part, relating to the destruction or loss of spirits, denatured 
spirits, articles, or wines in bond, shall be filed with the regional 
director (compliance) and shall set forth the following:
    (1) Identification (including serial numbers if any) and location of 
the container or containers from which the spirits, denatured spirits, 
articles, or wines were lost, or removed for destruction;
    (2) Quantity of spirits, denatured spirits, articles, or wines lost 
or destroyed from each container, and the total quantity of spirits or 
wines covered by the claim;
    (3) Total amount of tax for which the claim is filed;
    (4) Name, number, and address of the plant from which withdrawn 
without payment of tax or removed for transfer in bond (if claim 
involves spirits so withdrawn or removed or if claim involves wines 
transferred in bond) and date and purpose of such withdrawal or removal, 
except that in the case of imported spirits lost or destroyed while 
being transferred from customs custody to ATF bond as provided in 
Sec. 19.481, the name of the customs warehouse, if any, and port of 
entry will be given instead of the plant name, number, and address;
    (5) Date of the loss or destruction (or, if not known, date of 
discovery), the cause or nature thereof, and all the facts relative 
thereto;
    (6) Name of the carrier, where a loss in transit is involved;
    (7) The name and address of the consignee, in the case of spirits 
withdrawn without payment of tax which are lost before being used for 
research, development or testing;
    (8) If lost by theft, facts establishing that the loss did not occur 
as the result of any negligence, connivance, collusion or fraud on the 
part of the proprietor of the plant, owner, consignor, consignee, 
bailee, or carrier, or the employees or agents of any of them;
    (9) In the case of a loss by theft, whether the claimant is 
indemnified or recompensed for the spirits or wines lost and if so, the 
amount and nature of indemnity or recompense and the actual value of the 
spirits or wines, less the tax.
    (b) Claims for abatement, credit or refund. Claims for abatement of 
an assessment, or for credit or refund of tax which has been paid or 
determined, for spirits, denatured spirits, articles, or wines lost or 
destroyed in bond shall be

[[Page 293]]

filed with the regional director (compliance). The claims shall set 
forth the information required under paragraph (a) of this section and, 
in addition, shall set forth--
    (1) The date of assessment or payment (or of tax determination, if 
the tax has not been assessed or paid) of the tax for which abatement, 
credit or refund is claimed, and
    (2) The name, plant number, and the address of the plant where the 
tax was determined, paid, or assessed (or name, address and capacity of 
any other person who paid or was assessed the tax, if the tax was not 
paid by or assessed against a proprietor).
    (c) Supporting document. (1) Claims under paragraphs (a) and (b) of 
this section shall be supported (whenever possible) by affidavits of 
persons having personal knowledge of the loss or destruction. For claims 
on spirits, denatured spirits, articles, or wines lost while being 
transferred by carrier, the claim shall be supported by a copy of the 
bill of lading.
    (2) For claims pertaining to losses of spirits withdrawn without 
payment of tax and lost prior to being used for research, development or 
testing, the claim shall be supported by a copy of the proprietor's 
sample record prescribed in subpart W of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1381, as amended 
(26 U.S.C. 5008, 5370))

Sec. 19.42  Claims on spirits returned to bonded premises.

    (a) Claims for credit or refund of tax on spirits which have been 
withdrawn from bonded premises on payment or determination of tax and 
which are returned under 26 U.S.C. 5215 shall be filed with the regional 
director (compliance) and shall set forth the following:
    (1) Quantity of spirits so returned;
    (2) Amount of tax for which the claim is filed;
    (3) Name, address, and plant number of the plant to which the 
spirits were returned and the date of the return;
    (4) The purpose for which returned; and
    (5) The serial number of the gauge record on which the spirits were 
returned.
    (b) If the alcoholic content of the spirits contain at least 92 
percent Puerto Rican or Virgin Islands rum, or if the spirits contain 
rum imported from any area other than Puerto Rico and the Virgin 
Islands, the claim shall show:
    (1) Proof gallons of the finished product derived from Puerto Rican 
or Virgin Islands spirits, or derived from rum imported from any other 
area; and
    (2) The amount of tax imposed by 26 U.S.C. 7652 or 26 U.S.C. 5001, 
determined at the time of withdrawal from bond, on the Puerto Rican or 
Virgin Islands spirits, or on the rum imported from any other area, 
contained in the product.
    (c) Claims for credit or refund of tax on spirits containing 
eligible wine or eligible flavors must set forth the date and serial 
number of the record of tax determination and the effective tax rate at 
which the tax was paid or determined. If this information is not 
provided, the amount of tax claimed will be based on the lowest 
effective tax rate applied to the product.
    (d) Claims for credit or refund of tax shall be filed by the 
proprietor of the plant to which the spirits were returned within six 
months of the date of the return. No interest is allowed on any claims 
for refund or credit.

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-233, 51 
FR 28077, Aug. 5, 1986; T.D. ATF-297, 55 FR 18063, Apr. 30, 1990]

Sec. 19.43  Claims relating to spirits lost after tax determination.

    Claims for abatement, credit, or refund of tax under this part, 
relating to losses of spirits occurring on bonded premises after tax 
determination but prior to physical removal from such premises, shall be 
prepared and filed as provided in, and contain the information called 
for under Sec. 19.41(b) and be supported by documents as provided under 
Sec. 19.41(c).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008))

Sec. 19.44  Execution of claims and supporting documents.

    All claims filed under this part shall be filed on Form 2635 
(5620.8). Claims

[[Page 294]]

for abatement, remission, credit, or refund shall (a) show the name, 
address, and capacity of the claimant, (b) be signed by the claimant or 
his duly authorized agent, and (c) be executed under the penalties of 
perjury as provided in Sec. 19.100. Supporting documents required by 
this part to be submitted with a claim shall be attached to the claim 
and shall be deemed to be a part thereof. The regional director 
(compliance) may require the submission of additional evidence in 
support of any claim filed under this part when deemed necessary for 
proper action on the claim.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008); 
sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985; T.D. 
ATF-251, 52 FR 19313, May 22, 1987]

Sec. 19.45  Claims for credit of tax.

    Claims for credit of tax, as provided in this part, may be filed 
after determination of the tax whether or not the tax has been paid. The 
claimant may not anticipate allowance of a credit or make an adjusting 
entry in a tax return pending action on the claim.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008); 
sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))

Sec. 19.46  Adjustments for credited tax.

    When notification of allowance of credit is received from the 
regional director (compliance), including notification of credit for tax 
on spirits exported with benefit of drawback as provided in 27 CFR part 
252, the claimant shall make an adjusting entry and explanatory 
statement (specifically identifying the notification of allowance of 
credit) in the next excise tax return (or returns) to the extent 
necessary to exhaust the credit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1336, as amended 
(26 U.S.C. 5008, 5062))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50 
FR 51387, Dec. 17, 1985]

                Subpart Ca--Special (Occupational) Taxes

    Source: T.D. ATF-271, 53 FR 17541, May 17, 1988, unless otherwise 
noted.

Sec. 19.49  Liability for special tax.

    (a) Proprietor of distilled spirits plant--(1) General. Except as 
provided in Sec. 19.906, every proprietor of a distilled spirits plant 
shall pay a special (occupational) tax at a rate specified by 
Sec. 19.50. The tax shall be paid on or before the date of commencing 
business as a distilled spirits plant proprietor, and thereafter every 
year on or before July 1. On commencing business, the tax shall be 
computed from the first day of the month in which liability is incurred, 
through the following June 30. Thereafter, the tax shall be computed for 
the entire year (July 1 through June 30).
    (2) Transition rule. For purposes of paragraph (a)(1) of this 
section, a proprietor engaged in distilled spirits plant operations on 
January 1, 1988, shall be treated as having commenced business on that 
date. The special tax imposed by this transition rule shall cover the 
period January 1, 1988, through June 30, 1988, and shall be paid on or 
before April 1, 1988.
    (b) Liquor Dealer--(1) General. A proprietor of a distilled spirits 
plant shall be subject to or exempt from a liquor dealer's special 
(occupational) tax as provided in part 194 of this chapter.
    (2) Exemption for sales by a proprietor of a distilled spirits 
plant. A proprietor of a distilled spirits plant is not required to pay 
special tax as a wholesale or retail dealer in liquor because of sales, 
at the principal place of business or at the distilled spirits plant, of 
liquor which at the time of sale is stored at the distilled spirits 
plant or which had been removed and stored in a taxpaid storeroom 
operated in connection with the distilled spirits plant. Each proprietor 
of a distilled spirits plant shall have only one exemption from dealer's 
special tax for each distilled spirits plant. The distiller may 
designate, in writing to the regional director (compliance), that the 
principal place of business will be exempt from

[[Page 295]]

dealer's special tax; otherwise, the exemption will apply to the 
distilled spirits plant.
    (c) Each place of business taxable--(1) General. A proprietor of a 
distilled spirits plant incurs special tax liability at each place of 
business in which an occupation subject to special tax is conducted. A 
place of business means the entire office, plant or area of the business 
in any one location under the same proprietorship. Passageways, streets, 
highways, rail crossings, waterways, or partititions dividing the 
premises are not sufficient separation to require additional special 
tax, if the divisions of the premises are otherwise contiguous.
    (2) Exception for contiguous areas. A proprietor of a distilled 
spirits plant does not incur additional special tax liability for sales 
of liquor made at a location other than on distilled spirits plant 
premises described on the notice of registration, Form 5110.41, if the 
location where such sales are made is contiguous to the distilled 
spirits plant premises in the manner described in paragraph (c)(1) of 
this section.

(26 U.S.C. 5081, 5111, 5113, 5142, 5143)

[T.D. ATF-271, 53 FR 17541, May 17, 1988, as amended by T.D. ATF-285, 54 
FR 12609, Mar. 28, 1989]

Sec. 19.50  Rates of special tax.

    (a) General. Title 26 U.S.C. 5081(a)(1) imposes a special tax of 
$1,000 per year on every proprietor of a distilled spirits plant.
    (b) Reduced rate for small proprietors. Title 26 U.S.C. 5081(b) 
provides for a reduced rate of $500 per year with respect to any 
distilled spirits plant proprietor whose gross receipts (for the most 
recent taxable year ending before the first day of the taxable period to 
which the special tax imposed by Sec. 19.49 relates) are less than 
$500,000. The ``taxable year'' to be used for determining gross receipts 
is the taxpayer's income tax year. All gross receipts of the taxpayer 
shall be included, not just the gross receipts of the business subject 
to special tax. Proprietors of new businesses that have not yet begun a 
taxable year, as well as proprietors of existing businesses that have 
not yet ended a taxable year, who commence a new activity subject to 
special tax, qualify for the reduced special (occupational) tax rate, 
unless the business is a member of a ``controlled group''; in that case, 
the rules of paragraph (c) of this section shall apply.
    (c) Controlled group. All persons treated as one taxpayer under 26 
U.S.C. 5061(e)(3) shall be treated as one taxpayer for the purpose of 
determining gross receipts under paragraph (b) of this section. 
``Controlled group'' means a controlled group of corporations, as 
defined in 26 U.S.C. 1563 and implementing regulations in 26 CFR 1.1563-
1 through 1.1563-4, except that the words ``at least 80 percent'' shall 
be replaced by the words ``more than 50 percent'' in each place they 
appear in subsection (a) of 26 U.S.C. 1563, as well as in the 
implementing regulations. Also, the rules for a ``controlled group of 
corporations'' apply in a similar fashion to groups which include 
partnerships and/or sole proprietorships. If one entity maintains more 
than 50% control over a group consisting of corporations and one, or 
more, partnerships and/or sole proprietorships, all of the members of 
the controlled group are one taxpayer for the purpose of this section.
    (d) Short taxable year. Gross receipts for any taxable year of less 
than 12 months shall be annualized by multiplying the gross receipts for 
the short period by 12 and dividing the result by the number of months 
in the short period, as required by 26 U.S.C. 448(c)(3).
    (e) Returns and allowances. Gross receipts for any taxable year 
shall be reduced by returns and allowances made during that year under 
26 U.S.C. 448(c)(3).

(26 U.S.C. 448, 5061, 5081)

Sec. 19.51  Special tax returns.

    (a) General. Special tax shall be paid by return. The prescribed 
return is ATF Form 5630.5, Special Tax Registration and Return. Special 
tax returns, with payment of tax, shall be filed with ATF in accordance 
with instructions on the form.
    (b) Preparation of ATF Form 5630.5. All of the information called 
for on Form 5630.5 shall be provided, including:
    (1) The true name of the taxpayer.

[[Page 296]]

    (2) The trade name(s) (if any) of the business(es) subject to 
special tax.
    (3) The employer identification number (see Sec. 19.52).
    (4) The exact location of the place of business, by name and number 
of building or street, or if these do not exist, by some description in 
addition to the post office address. In the case of one return for two 
or more locations, the address to be shown shall be the taxpayer's 
principal place of business (or principal office, in the case of a 
corporate taxpayer).
    (5) The class(es) of special tax to which the taxpayer is subject.
    (6) Ownership and control information: that is, the name, position, 
and residence address of every owner of the business and of every person 
having power to control its management and policies with respect to the 
activity subject to special tax. ``Owner of the business'' shall include 
every partner, if the taxpayer is a partnership, and every person owning 
10% or more of its stock, if the taxpayer is a corporation. However, the 
ownership and control information required by this paragraph need not be 
stated if the same information has been previously provided to ATF in 
connection with a permit application, and if the information previously 
provided is still current.
    (c) Multiple locations and/or classes of tax. A taxpayer subject to 
special tax for the same period at more than one location or for more 
than one class of tax shall--
    (1) File one special tax return, ATF Form 5630.5, with payment of 
tax, to cover all such locations and classes of tax; and
    (2) Prepare, in duplicate, a list identified with the taxpayer's 
name, address (as shown on ATF Form 5630.5), employer identification 
number, and period covered by the return. The list shall show, by 
States, the name, address, and tax class of each location for which 
special tax is being paid. The original of the list shall be filed with 
ATF in accordance with instructions on the return, and the copy shall be 
retained at the taxpayer's principal place of business (or principal 
office, in the case of a corporate taxpayer) for the period specified in 
Sec. 19.723(c).
    (d) Signing of ATF Forms 5630.5--(1) Ordinary returns. The return of 
an individual proprietor shall be signed by the individual. The return 
of a partnership shall be signed by a general partner. The return of a 
corporation shall be signed by any officer. In each case, the person 
signing the return shall designate his or her capacity as ``individual 
owner,'' ``member of firm,'' or, in the case of a corporation, the title 
of the officer.
    (2) Fiduciaries. Receivers, trustees, assignees, executors, 
administrators, and other legal representatives who continue the 
business of a bankrupt, insolvent, deceased person, etc., shall indicate 
the fiduciary capacity in which they act.
    (3) Agent or attorney in fact. If a return is signed by an agent or 
attorney in fact, the signature shall be preceded by the name of the 
principal and followed by the title of the agent or attorney in fact. A 
return signed by a person as agent will not be accepted unless there is 
filed, with the ATF office with which the return is required to be 
filed, a power of attorney authorizing the agent to perform the act.
    (4) Perjury statement. ATF Forms 5630.5 shall contain or be verified 
by a written declaration that the return has been executed under the 
penalties of perjury.

(26 U.S.C. 6061, 6065, 6151, 7011)

Sec. 19.52  Employer identification number.

    (a) Requirement. The employer identification number (defined in 26 
CFR 301.7701-12) of the taxpayer who has been assigned such a number 
shall be shown on each special tax return, including amended returns, 
filed under this subpart. Failure of the taxpayer to include the 
employer identification number may result in the imposition of the 
penalty specified in Sec. 70.113 of this chapter.
    (b) Application for employer identification number. Each taxpayer 
who files a special tax return, who has not already been assigned an 
employer identification number, shall file IRS Form SS-4 to apply for 
one. The taxpayer shall apply for and be assigned only one employer 
identification number, regardless of the number of places of business

[[Page 297]]

for which the taxpayer is required to file a special tax return. The 
employer identification number shall be applied for no later than 7 days 
after the filing of the taxpayer's first special tax return. IRS Form 
SS-4 may be obtained from the director of an IRS service center or from 
any IRS district director.
    (c) Preparation and filing of IRS Form SS-4. The taxpayer shall 
prepare and file IRS Form SS-4, together with any supplementary 
statement, in accordance with the instructions on the form or issued in 
respect to it.

(26 U.S.C. 6109)

[T.D. ATF-271, 53 FR 17541, May 17, 1988, as amended by T.D. ATF-301, 55 
FR 47605, Nov. 14, 1990]

                           Special Tax Stamps

Sec. 19.53  Issuance, distribution, and examination of special tax 
          stamps.

    (a) Issuance of special tax stamps. Upon filing a properly executed 
return on ATF Form 5630.5, together with the full remittance, the 
taxpayer will be issued an appropriately designated special tax stamp. 
If the return covers multiple locations, the taxpayer will be issued one 
appropriately designated stamp for each location listed on the 
attachment required by Sec. 19.51(c), but showing, as to name and 
address, only the name of the taxpayer and the address of the taxpayer's 
principal place of business (or principal office in the case of a 
corporate taxpayer).
    (b) Distribution of special tax stamps for multiple locations. On 
receipt of the special tax stamps, the taxpayer shall verify that there 
is one stamp for each location listed on the attachment to ATF Form 
5630.5. The taxpayer shall designate one stamp for each location and 
shall type on each stamp the address of the business conducted at the 
location for which that stamp is designated. The taxpayer shall then 
forward each stamp to the place of business designated on the stamp.
    (c) Examination of special tax stamps. All stamps denoting payment 
of special tax shall be kept available for inspection by ATF officers, 
at the location for which designated, during business hours.

(26 U.S.C. 5146, 6806)

Sec. 19.54  Changes in special tax stamps.

    (a) Change in name. If there is a change in the corporate or firm 
name, or in the trade name, as shown on Form 5630.5, the proprietor 
shall file an amended special tax return as soon as practicable after 
the change, covering the new corporate or firm name, or trade name. No 
new special tax is required to be paid. The proprietor shall attach the 
special tax stamp for endorsement of the change in name.
    (b) Change in proprietorship--(1) General. If there is a change in 
the proprietorship of a distilled spirits plant, the successor shall pay 
a new special tax and obtain the required special tax stamps.
    (2) Exemption for certain successors. Persons having the right of 
succession provided for in paragraph (c) of this section may carry on 
the business for the remainder of the period for which the special tax 
was paid, without paying a new special tax, if within 30 days after the 
date on which the successor begins to carry on the business, the 
successor files a special tax return on ATF Form 5630.5 with ATF, which 
shows the basis of succession. A person who is a successor to a business 
for which special tax has been paid and who fails to register the 
succession is liable for special tax computed from the first day of the 
calendar month in which he or she began to carry on the business.
    (c) Persons having right of succession. Under the conditions 
indicated in paragraph (b)(2) of this section, the right of succession 
will pass to certain persons in the following cases:
    (1) Death. The widowed spouse or child, or executor, administrator, 
or other legal representative of the taxpayer;
    (2) Succession of spouse. A husband or wife succeeding to the 
business of his or her spouse (living);
    (3) Insolvency. A receiver or trustee in bankruptcy, or an assignee 
for benefit of creditors;
    (4) Withdrawal from firm. The partner or partners remaining after 
death or withdrawal of a member.
    (d) Change in location. If there is a change in location of a 
taxable place of business, the proprietor shall, within 30 days after 
the change, file with ATF an

[[Page 298]]

amended special tax return covering the new location. The proprietor 
shall attach the special tax stamp or stamps, for endorsement of the 
change in location. No new special tax is required to be paid. However, 
if the proprietor does not file the amended return within 30 days, the 
proprietor is required to pay a new special tax and obtain a new special 
tax stamp.

(26 U.S.C. 5143, 7011)

         Subpart D--Administrative and Miscellaneous Provisions

                   Activities Not Subject to This Part

Sec. 19.57  Recovery and reuse of denatured spirits in manufacturing 
          processes.

    The following persons are not, by reason of the activities listed 
below, subject to the provisions of this part, but they shall comply 
with the provisions of part 20 of this chapter relating to the use and 
recovery of spirits or denatured spirits:
    (a) Manufacturers who use denatured spirits, or articles or 
substances containing denatured spirits, in a process wherein any part 
or all of the spirits, including denatured spirits, are recovered.
    (b) Manufacturers who use denatured spirits in the production of 
chemicals which do not contain spirits but which are used on the permit 
premises in the manufacture of other chemicals resulting in spirits as a 
by-product.
    (c) Manufacturers who use chemicals or substances which do not 
contain spirits or denatured spirits (but which were manufactured with 
specially denatured spirits) in a process resulting in spirits as a by-
product.

(Sec 201, Pub. L. 85-859, 72 Stat. 1372, as amended (26 U.S.C. 5273))

[T.D. ATF-379, 61 FR 31425, June 20, 1996]

Sec. 19.58  Use of taxpaid distilled spirits to manufacture products 
          unfit for beverage use.

    (a) General. Apothecaries, pharmacists, and manufacturers are not 
required to qualify as processors under 26 U.S.C. 5171 before 
manufacturing or compounding the following products, if the tax has been 
paid or determined on all of the distilled spirits contained therein:
    (1) Medicines, medicinal preparations, food products, flavors, 
flavoring extracts, and perfume, conforming to the standards for 
approval of nonbeverage drawback products found in Secs. 17.131-17.137 
of this chapter, whether or not drawback is actually claimed on those 
products. Except as provided in paragraph (c) of this section, a formula 
need not be submitted if drawback is not desired.
    (2) Patented, patent, and proprietary medicines that are unfit for 
use for beverage purposes.
    (3) Toilet, medicinal, and antiseptic preparations and solutions 
that are unfit for use for beverage purposes.
    (4) Laboratory reagents, stains, and dyes that are unfit for use for 
beverage purposes.
    (5) Flavoring extracts, syrups, and concentrates that are unfit for 
use for beverage purposes.
    (b) Exceptions; products classed as beverages. Products specified 
under part 17 of this chapter as being fit for beverage use are 
alcoholic beverages. Bitters, patent medicines, and similar alcoholic 
preparations which are fit for beverage purposes, although held out as 
having certain medicinal properties, are also alcoholic beverages. Such 
products are required to be manufactured on the bonded premises of a 
distilled spirits plant, and are subject to the provisions of this part.
    (c) Formulas and samples; when required. On request of the Director, 
or when in doubt as to the classification of a product, the manufacturer 
shall submit to the Director the formula for and a sample of the product 
for examination to verify the manufacturer's claim of exemption from 
qualification requirements.
    (d) Change of formula; when required. If the regional director 
(compliance) finds at any time that any product manufactured under 
paragraph (a) of this section is being used for beverage purposes, or 
for mixing with beverage spirits other than by a processor, he or she 
shall notify the manufacturer to desist from manufacturing the product 
until the formula is changed to make the product not susceptible of 
beverage use and the change is approved by the

[[Page 299]]

Director. (However, the provisions of this paragraph shall not prohibit 
such products, which are unfit for beverage use, from being used in 
small quantities for flavoring drinks at the time of serving for 
immediate consumption.) Where, pursuant to notice, the manufacturer does 
not desist, or the formula is not so modified as to make the product 
unsusceptible of beverage use, the manufacturer shall immediately 
qualify as a processor.

(Sec. 805, Pub. L. 96-39, 93 Stat. 275, 278 (26 U.S.C. 5002, 5171))

[T.D. ATF-379, 61 FR 31425, June 20, 1996]

                       Authorities of the Director

Sec. 19.61  Form prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part. All of the information required by each form shall be 
furnished, as indicated by the headings on the form and the instructions 
thereon or issued in respect thereto, and as required by this part.
    (b) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. 372, 61 FR 
20724, May 8, 1996]

Sec. 19.62  Alternate methods or procedures.

    The proprietor, on specific approval by the Director as provided in 
this paragraph, may use an alternate method or procedure in lieu of a 
method or procedure specifically prescribed in this part. The Director 
may approve an alternate method or procedure, subject to stated 
conditions, when he finds that--
    (a) Good cause has been shown for the use of the alternate method or 
procedure;
    (b) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescibed 
method or procedure, and affords equivalent security to the revenue; and
    (c) The alternate method or procedure will not be contrary to any 
provision of law, and will not result in an increase in cost to the 
Government or hinder the effective administration of this part. No 
alternate method or procedure relating to the giving of any bond or to 
the assessment, payment, or collection of tax, shall be authorized under 
this paragraph. Where the proprietor desires to employ an alternate 
method or procedure, he shall submit a written application to do so to 
the regional director (compliance), for transmittal to the Director. The 
application shall specifically describe the proposed alternate method or 
procedure, and shall set forth the reasons therefor. Alternate methods 
or procedures shall not be employed until the application has been 
approved by the Director. The proprietor shall, during the period of 
authorization of an alternate method or procedure, comply with the terms 
of the approved application. Authorization for any alternate method or 
procedure may be withdrawn whenever in the judgment of the Director the 
revenue is jeopardized or the effective administration of this part is 
hindered by the continuation of such authorization. As used in this 
paragraph, alternate methods or procedures shall include alternate 
construction or equipment.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended, 1395, as amended 
(26 U.S.C. 5178, 5552))

Sec. 19.63  Pilot operations.

    The Director may waive any regulatory provisions of 26 U.S.C. 
Chapter 51, and of the regulations in this part, for temporary pilot or 
experimental operations for the purpose of facilitating the development 
and testing of improved methods of governmental supervision (necessary 
for the protection of the revenue) over plants. For this purpose, the 
Director may, with the approval of the proprietor thereof, designate any 
plant for such operations. The provision of law and regulations waived 
and the period of time during which such waiver shall continue shall be 
stated in writing by the Director. The provisions of this section shall 
not be construed as authority to waive the filing of any bond or the 
payment of any tax, including special (occupational) tax, provided for 
in 26 U.S.C. Chapter 51.


[[Page 300]]


(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5554))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-271 53 
FR 17543, May 17, 1988]

Sec. 19.64  [Reserved]

Sec. 19.65  Experimental distilled spirits plants.

    The Director may authorize the establishment and operation of 
experimental plants for specific and limited periods of time solely for 
experimentation in, or development of--
    (a) Sources of materials from which spirits may be produced;
    (b) Processes by which spirits may be produced or refined; or
    (c) Industrial uses of spirits.

The Director may waive any provision of 26 U.S.C. Chapter 51 (other than 
26 U.S.C. 5312) and of this part (other than this section and 
Sec. 19.66) to the extent he deems necessary to effectuate the purposes 
of 26 U.S.C. 5312(b), except that he may not waive the payment of any 
tax on spirits removed from such plant. A proprietor of an experimental 
distilled spirits plant established under this section is subject to 
special (occupational) tax under subpart Ca of this part and shall hold 
a separate special tax stamp to cover the experimental operations.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C. 5312))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-271 53 
FR 17543, May 17, 1988]

Sec. 19.66  Application to establish experimental plants.

    Any person desiring to establish an experimental plant shall make 
written application to the Director, through the regional director 
(compliance), and obtain the Director's approval of the proposed 
establishment. The applicant shall file with such application a bond in 
such form and penal sum as required by the Director. The application 
shall state the nature, extent, and purpose of the operations to be 
conducted and describe the operations and equipment, the location of the 
plant (including the proximity to other premises or operations subject 
to the provisions of 26 U.S.C. Chapter 51) and the security measures to 
be provided. The Director may require the submission of additional 
information as he deems necessary. The regional director (compliance) 
shall not permit operations until he has found that the plant conforms 
to the specifications set forth in the application, as approved, and the 
applicant has complied with provisions of 26 U.S.C. Chapter 51, and this 
part not specifically waived by the Director.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C. 5312))

Sec. 19.67  Spirits produced in industrial processes.

    (a) Applicability. (1) Persons who produce spirits in industrial 
processes (including spirits produced as a by-product in connection with 
chemical or other processes) are distillers and are required to qualify 
and pay special (occupational) tax under provisions of 26 U.S.C. Chapter 
51 and this part.
    (2) The Director may, however, waive any provision of 26 U.S.C. 
Chapter 51, or of this part, with respect to the production of 
nonpotable chemical mixtures containing spirits, including any provision 
relating to qualification (except the payment of special (occupational) 
tax), if such mixtures are produced:
    (i) For transfer to the bonded premises of a distilled spirits plant 
for completion of distilling; or
    (ii) As a by-product which would require expensive and complex 
equipment for the recovery of spirits.
    (3) The waiver under the provisions of paragraph (a)(2)(ii) of this 
section is further conditioned that such mixture would:
    (i) Be destroyed on the premises where produced; or
    (ii) Contain a minimum quantity of spirits practicable with the 
procedure employed, not be subjected to further operations solely for 
the purification or recovery of spirits, and be found by the Director to 
be as nonpotable and at least as difficult with respect to recovery as 
completely denatured alcohol.
    (b) Application for waiver. (1) When the producer of nonpotable 
mixtures desires to secure a waiver of designated provisions of 26 
U.S.C. Chapter 51, or this part, he shall file an application

[[Page 301]]

with the Director through the regional director (compliance).
    (2) The application shall include, as applicable--
    (i) Name and address of producer;
    (ii) Chemical composition and source of the nonpotable mixture;
    (iii) Approximate percentages of chemicals and spirits in the 
mixture;
    (iv) Method of operation proposed;
    (v) Bonded premises where the mixture will be distilled; and
    (vi) Other pertinent information required by the Director.
    (c) Approval. If the Director finds that the waiver of the 
requirements, or any of them, will not jeopardize the revenue and will 
not unduly hinder supervision of the operations, he may approve the 
application under such terms and conditions as he deems advisable and 
subject to the furnishing of any bond which he deems necessary.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-271 53 
FR 17543, May 17, 1988]

Sec. 19.68  Other businesses.

    The Director may authorize the carrying on of other businesses (not 
specifically prohibited by 26 U.S.C. 5601(a)(6)) on premises of plants 
if he finds that those businesses will not jeopardize the revenue, 
hinder the effective administration of this part, or be contrary to law. 
The authorization will designate the premises (i.e., bonded or general) 
on which such other business is to be conducted.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))

Sec. 19.70  Exemptions to meet the requirements of National defense.

    The Director may temporarily exempt proprietors from any provision 
of the internal revenue laws or this part relating to spirits except 
those requiring payment of tax thereon whenever in his judgement it is 
expedient to do so to meet the requirements of the National defense.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1397, as amended (26 U.S.C. 5561))

Sec. 19.71  Experimental or research operations by scientific 
          institutions and colleges of learning.

    (a) General. The Director may authorize any scientific university, 
college of learning, or institution of scientific research to produce, 
receive, blend, treat, test, and store spirits, without payment of tax, 
for experimental or research use but not for consumption (other than 
organoleptic tests) or sale, in quantities as may be reasonably 
necessary for such purposes. The Director may waive any provision of 26 
U.S.C. Chapter 51 (other than 26 U.S.C. 5312), or this part (other than 
this section) to the extent necessary to effect the purposes of 26 
U.S.C. 5312(a), except he may not waive the payment of any tax on 
distilled spirits removed from any university, college, or institution. 
A person conducting experimental or research operations authorized under 
this section is subject to special (occupational) tax under subpart Ca 
of this part and shall hold a special tax stamp to cover the 
experimental or research operations.
    (b) Qualification. Any university, college, or institution desiring 
to conduct any of the experimental or research operations listed in the 
preceding paragraphs shall make written application, to the Director, 
through the regional director (compliance), and obtain the Director's 
approval of the proposed operations. The applicant shall file with the 
application a bond in a form and penal sum as required by the Director. 
The application shall state the nature, extent, and purpose of the 
operations to be conducted and describe the operations and equipment, 
the location at which operations will be conducted (including 
identification of the building or buildings, or the portions thereof to 
be used), and the security measures to be provided. The Director may 
require any additional information. Operations shall not be commenced 
until authorized by the Director.
    (c) Records. Reports concerning the operations need not be submitted 
unless required by the Director, but records of the quantities of 
spirits produced, received, and used each day shall be made and retained 
for inspection by ATF officers.

[[Page 302]]

    (d) Discontinuance of operations. When operations authorized by the 
Director are discontinued, all remaining spirits shall be disposed of by 
destruction. When these spirits have been destroyed, notice of the 
discontinuance of operations shall be given to the regional director 
(compliance).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C. 5312))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-271, 53 
FR 17543, May 17, 1988]

            Authorities of the Regional Director (Compliance)

Sec. 19.72  Other businesses.

    Application to conduct at a distilled spirits plant a type of 
business other than that of a distiller, warehouseman, or processor may 
be approved by the regional director (compliance) if the Director has, 
as provided in Sec. 19.68, authorized the carrying on of a business of 
the type proposed, unless the regional director (compliance) finds that 
there are particular conditions in respect to the applicant's plant that 
would cause the carrying on of such business to be a jeopardy to the 
revenue or a hindrance to the effective administration of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))

Sec. 19.73  Emergency variations from requirements.

    The regional director (compliance) may approve construction, 
equipment, and methods of operation other than as specified in this 
part, where he finds that an emergency exists and the proposed 
variations from the specified requirements are necessary, and the 
proposed variations--
    (a) Will afford the security and protection to the revenue intended 
by the prescribed specifications;
    (b) Will not hinder the effective administration of this part; and
    (c) Will not be contrary to any provisions of law.

Variations from requirements granted under this paragraph are 
conditioned on compliance with the procedures, conditions, and 
limitations with respect thereto set forth in the approval of the 
application. Failure to comply in good faith with such procedures, 
conditions, and limitations shall automatically terminate the authority 
for such variations and the proprietor thereupon shall fully comply with 
the prescribed requirements of regulations from which the variations 
were authorized. Authority for any variation may be withdrawn whenever 
in the judgement of the regional director (compliance) the revenue is 
jeopardized or the effective administration of this part is hindered by 
the continuation of such variation. Where the proprietor desires to 
employ such variation, he shall submit a written application to do so to 
the regional director (compliance). The application shall describe the 
proposed variations and set forth the reasons therefor. Variations shall 
not be employed until the application has been approved.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended, 1395, as amended 
(26 U.S.C. 5178, 5552))

Sec. 19.74  Disaster exemptions.

    The regional director (compliance) may, whenever he finds that it is 
necessary or desirable, by reason of disaster, temporarily exempt the 
proprietor of any plant from any provisions of the internal revenue laws 
and this part relating to spirits, except those requiring the payment of 
tax on spirits, to the extent he may deem necessary or desirable.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1397, as amended (26 U.S.C. 5562))

Sec. 19.75  Assignment of officers and supervision of operations.

    (a) General. The regional director (compliance) may assign such 
number of ATF officers to distilled spirits plants and utilize controls 
(including the use of Government locks and seals) as necessary to 
maintain supervision of operations conducted at such plants. When 
supervision is necessary:
    (1) The regional director (compliance) may require a proprietor to 
delay any distilled spirits operation so that it may be conducted in the 
presence of an ATF officer; and
    (2) The regional director (compliance) may require the proprietor to

[[Page 303]]

submit a schedule of operations to an ATF officer.
    (b) Hours of operation. When operations at a distilled spirits plant 
are to be conducted in the presence of an ATF officer, such operations: 
(1) Shall not be conducted on Sunday unless specifically authorized by 
the regional director (compliance) in each instance on the showing of an 
emergency; and (2) Shall be conducted during an 8-hour period between 7 
a.m. and 5 p.m. unless, pursuant to the proprietor's application the 
regional director (compliance) authorizes the performance and 
supervision of operations during other hours. The regional director 
(compliance), in administering this provision, shall not restrict such 
operation or function to a greater extent than did the provisions of 
internal revenue law and regulations on June 30, 1959.
    (c) Notification of supervision. (1) When it is determined that 
supervision of plant operations is necessary, the regional director 
(compliance) shall notify the proprietor of the extent of ATF 
supervision.
    (2) If supervision of a distilled spirits plant was not terminated 
as of December 31, 1979, notification is not necessary for continued 
supervision.
    (d) Withdrawal of supervision. The regional director (compliance) 
shall notify the proprietor when ATF supervision of plant operations is 
to be withdrawn.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5553); 
sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5201, 5202))

Sec. 19.76  Allowance of remission, abatement, credit or refund of tax.

    The regional director (compliance) is authorized to allow claims for 
remission, abatement, credit, and refund of tax, filed under the 
provisions of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008))

Sec. 19.77  Installation of meters, tanks and other apparatus.

    The regional director (compliance) is authorized to require the 
proprietor to install meters, tanks, pipes, or any other apparatus which 
the regional director (compliance) deems advisable for the purpose of 
protecting the revenue. Any proprietor refusing or neglecting to install 
such apparatus when so required shall not be permitted to conduct 
business.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5552))

Sec. 19.78  Approval of qualifying documents.

    The regional director (compliance) is authorized to approve, except 
as otherwise provided in this part, all qualifying documents, including 
bonds and consents of surety, required by this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1394, as amended 
(26 U.S.C. 5172, 5551); sec. 805, Pub. L. 96-39, 93 Stat. 275, 276 (26 
U.S.C. 5171, 5173))

Sec. 19.79  Discontinuance of storage facilities.

    When the regional director (compliance) finds that any facilities 
for the storage of spirits on bonded premises are unsafe or unfit for 
use, or that spirits stored are subject to great loss or wastage, he may 
require the discontinuance of the use of such facilities and require the 
spirits contained therein to be transferred to such other storage 
facilities as he may designate. Such transfer shall be made at such time 
and under such supervision as the regional director (compliance) may 
require and the expense of the transfer shall be paid by the owner or 
the warehouseman of the spirits. Whenever the owner of such spirits or 
the warehouseman fails to make such transfer within the time prescribed 
or to pay the just and proper expense of such transfer, as ascertained 
and determined by the regional director (compliance), such spirits may 
be seized and sold in the same manner as goods sold on distraint for 
taxes, and the proceeds of such sale shall be applied to the payment of 
the taxes due thereon and the cost and expense of such sale and removal, 
and the balance shall be paid over to the owner of such spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5236))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]

[[Page 304]]

                       Authorities of ATF Officers

Sec. 19.81  Right of entry and examination.

    Any ATF officer may at all times, as well by night as by day, enter 
any distilled spirits plant, or any other premises where distilled 
spirits operations are carried on, or structure or place used in 
connection therewith for storage or other purposes; to make examination 
of the materials, equipment, and facilities thereon; and make such 
gauges and inventories as he deems necessary. Whenever any ATF officer, 
having demanded admittance, and having declared his name and office, is 
not admitted into such premises by the proprietor or other person having 
charge thereof, he may at all times, use such force as is necessary for 
him to gain entry to such premises.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1357, as amended (26 U.S.C. 5203))

Sec. 19.82  Detention of containers.

    Any ATF officer may detain any container containing, or supposed to 
contain, spirits when such officer has reason to believe that the tax 
imposed by law on such spirits has not been paid or determined as 
required by law or this part, or that such container is being removed in 
violation of law or this part. Every such container may be held by the 
ATF officer at a safe place until it shall be determined whether the 
property so detained is liable by law to be proceeded against for 
forfeiture. However, such summary detention shall not continue in any 
case longer than 72 hours without process of law or intervention of the 
regional director (compliance), unless the person in possession of the 
container immediately prior to its detention, in consideration of the 
container being kept on his premises during detention, executes a waiver 
of the 72-hours limitation on detention of the container.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1375 (26 U.S.C. 5311))

Sec. 19.83  Samples for the United States.

    Any ATF officer is authorized to take samples of spirits, denatured 
spirits, articles, wines, or any other materials which may be added to 
such products for analysis, testing, or other determinations to 
ascertain whether there is compliance with the provisions of law and 
regulations. When such samples are removed from the bonded premises, the 
ATF officer shall give the proprietor a receipt covering the sample so 
removed.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1357, as amended, 
1362, as amended, 1380, as amended (26 U.S.C. 5201, 5203, 5214, 5362))

Sec. 19.84  Gauging and measuring equipment.

    All gauging and measuring equipment and means required by 27 CFR 
part 30 and this part to be furnished by the proprietor for the purpose 
of ascertaining the quantity, alcoholic content, specific gravity, and 
producing capacity of any materials, denaturants, mash, wort, or beer, 
or the quantity and alcoholic content of spirits, denatured spirits, or 
wines, shall be maintained by the proprietor in accurate and readily 
usable condition. Any ATF officer may disapprove the use of any 
equipment or means if such officer finds it would be insufficiently 
accurate and the proprietor shall promptly provide accurate equipment or 
means in lieu of the disapproved equipment or means.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended, 1358, as amended 
(26 U.S.C. 5006, 5204))

                    Entry and Examination of Premises

Sec. 19.86  Furnishing facilities and assistance.

    On the demand of any ATF officer or agent, the proprietor shall 
furnish the necessary facilities and assistance to enable the officer or 
agent to gauge the spirits in any container or to examine any apparatus, 
equipment, containers, or materials on the distilled spirits plant 
premises. The proprietor shall also, on demand of an ATF officer or 
agent, open all doors, and open for examination all containers on the 
plant premises. The proprietor shall, on request of an ATF officer, 
furnish the exact locations (including the number of containers at each 
location) of all packages and similar portable approved containers 
within a given lot,

[[Page 305]]

and locations (i.e., buildings, rooms or areas) where spirits in cases 
are stored.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1357, as amended (26 U.S.C. 5203); 
sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5202))

       Gauging of Spirits, Wines or Alcoholic Flavoring Materials

Sec. 19.91  Gauging.

    (a) Gauging of spirits and wine. Gauges shall be made by the 
proprietor. However, the regional director (compliance) may require that 
such gauges be made in the presence of and be verified by an ATF 
officer. Gauges of spirits, denatured spirits, or wine shall be made in 
accordance with 27 CFR part 30 and as provided in this part. However, 
the gauge for wine that is to be transferred to a bonded wine cellar 
shall be recorded by kind and percent of alcohol by volume. When bulk 
spirits, denatured spirits, or wines are to be volumetrically measured, 
the measurement shall be in a tank or bulk conveyance for which a 
calibration chart is provided, by a meter approved under Sec. 19.277, 
or, when approved by the Director, by other devices or methods. 
Calibration charts shall be certified as accurate by persons qualified 
to calibrate tanks or bulk conveyances. When spirits in bottles are 
gauged, the gauge may be established on the basis of legible case 
markings and label information, if (1) the bottles are full, and (2) 
there is no evidence that the bottles have been tampered with.
    (b) Gauging of alcoholic flavoring materials. Each alcoholic 
flavoring material shall be gauged when dumped, except that when 
received from a manufacturer in a closed nonporous bottle, can, or 
package such material may be gauged by using the proof derived from the 
container label or a related statement of the proof from the 
manufacturer. When proof is determined from a label or manufacturer's 
statement, the proprietor shall periodically test a sufficient number of 
samples of the alcoholic flavoring material to verify the accuracy of 
the proof so determined and shall record the results of those tests on 
the gauge record. The regional director (compliance) may require that 
all alcoholic flavoring materials be gauged by the methods provided in 
27 CFR part 30.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1396, as amended 
(26 U.S.C. 5204, 5559))

Sec. 19.92  When gauges are required.

    (a) Initial proof. Except for a gauge required by Sec. 19.383 or 
Sec. 19.517 or in any case where the proof changes as a result of a 
storage or processing operation, the initial determination of proof for 
distilled spirits, wine, or eligible flavors may be used whenever a 
subsequent gauge is required by this part to be made at the same plant.
    (b) Required gauges. Spirits, wine and alcoholic flavoring materials 
shall be gauged whenever required by this part. Such gauges include:
    (1) Entered for deposit,
    (2) Filled into packages from storage tanks,
    (3) Transferred or received in bond,
    (4) Transferred between operational accounts,
    (5) Mixed in the manufacture of a distilled spirits product,
    (6) Reduced in proof prior to commencement of bottling,
    (7) Destroyed,
    (8) Removed or withdrawn from bond,
    (9) Returned to bond, or
    (10) As otherwise required by the regional director (compliance).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1396, as amended 
(26 U.S.C. 5204, 5559))

[T.D. ATF-199, 50 FR 9160, Mar. 6, 1985, as amended by T.D. ATF-297, 55 
FR 18063, Apr. 30, 1990]

Sec. 19.93  Quantity determination of spirits in bond.

    Where bulk spirits in bond are gauged for determination of tax, or 
are gauged in packages, the quantity shall be determined by weight 
pursuant to the provisions of 27 CFR part 30. In all other instances 
where spirits are gauged in bond, gauged for denaturation, or are gauged 
for transfer in bond or for withdrawal from bond free of tax or without 
payment of tax, the quantity may be determined by weight or volume. 
Volumetric determinations of quantity may be made by meters approved 
under Sec. 19.277.


[[Page 306]]


(Sec, 201, Pub. L. 85-859, 72 Stat. 1396, as amended (26 U.S.C. 5559))

          Securing of Conveyances Used for Transporting Spirits

Sec. 19.96  Securing of conveyances.

    (a) Construction for securing. If a conveyance is required by this 
part to be secured, the conveyance shall be constructed in such manner 
that all openings, including valves (if any) on bulk conveyances, may be 
closed and secured.
    (b) Approval of securing devices. (1) All seals, locks, or other 
devices that are required to be used on conveyances in which spirits are 
transferred in bond, or withdrawn free of tax or without payment of tax, 
shall be approved by the Director prior to use. However, cap seals, at 
least \3/4\ of an inch in diameter, and ball-strap-type (railroad) seals 
with a strap at least \5/16\ of an inch wide may be used on conveyances 
without prior approval of the Director. Such seals shall:
    (i) Be made of durable materials,
    (ii) Bear the plant registration number or name, or readily 
recognizable abbreviation of the name of the proprietor,
    (iii) Bear a serial number including letter prefixes or suffixes, 
that will not be repeated within a six month period,
    (iv) Be durably marked in readily legible form, and
    (v) Be made so that their being opened will leave evidence thereof.
    (2) Seals, locks or other devices that are used on conveyances to 
transport taxpaid spirits, or denatured spirits transferred in bond or 
withdrawn free of tax, need not be approved.
    (c) Furnishing and affixing securing devices. (1) Seals, locks, or 
other devices for use on conveyances shall be furnished and affixed by 
the proprietor.
    (2) The regional director (compliance) may, if he deems necessary, 
require conveyances in which spirits are: (i) transferred in bond, (ii) 
withdrawn free of tax, or (iii) withdrawn without payment of tax, to be 
secured by seals, locks, or other devices approved and furnished by the 
Bureau and affixed by an ATF officer.
    (3) Seals, locks, or other devices shall be affixed:
    (i) As soon as the conveyance is loaded for shipment, and
    (ii) In such a manner that access to the contents of the conveyance 
cannot be gained without showing evidence of tampering.
    (4) The openings of bulk conveyances may be secured with permanent 
seals, locks, or other devices.
    (d) Numbers and marks on proprietor's securing devices. Seals, 
locks, or other devices that are furnished by the proprietor for use on 
conveyances shall be serially numbered. Letter abbreviations of the name 
of a proprietor may not be used unless approved by the Director pursuant 
to written application.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended 1410, as amended 
(26 U.S.C. 5206, 5682))

            Conveyance of Spirits or Wines on Plant Premises

Sec. 19.97  Taxpaid spirits or wines on bonded premises.

    Spirits or wines on which the tax has been paid or determined may be 
conveyed within a plant across bonded premises, but such spirits or 
wines shall not be stored or allowed to remain on the bonded premises 
and shall be kept separate and apart from spirits or wines on which the 
tax has not been paid or determined. However, spirits returned to bonded 
premises in accordance with the provisions of 26 U.S.C. 5215 shall be 
allowed to remain on the bonded premises.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1404, as amended, 
(26 U.S.C. 5201, 5612))

Sec. 19.98  Conveyance of untaxpaid spirits or wines within a distilled 
          spirits plant.

    Untaxpaid spirits or wines may be conveyed between different 
portions of the bonded premises of the same distilled spirits plant, 
across any other premises of such plant; or (by uninterrupted 
transportation) over any public thoroughfare; or (by uninterrupted 
transportation) over a private roadway if the owner, or lessee, of the 
roadway agrees, in writing, to allow ATF officers access to the roadway 
to perform their necessary duties. The conveyance of spirits or wines as 
authorized in this

[[Page 307]]

section is subject to the following conditions:
    (a) The spirits or wines are not stored or allowed to remain on any 
premises of such plant other than bonded premises,
    (b) The spirits or wines are kept completely separate and apart from 
spirits on which the tax has been paid or determined,
    (c) A description of the means and route of the conveyance and of 
the portions of the distilled spirits plant between which spirits or 
wines will be conveyed, and a copy of any agreement furnished by the 
owner, or lessee, of a private roadway have been submitted to and 
approved by the regional director (compliance), and
    (d) Consent of surety on the operations or unit bond has been 
furnished by the proprietor, on Form 1533, extending the terms of the 
bond to cover conveyance of the spirits or wines.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1398, as amended 
(26 U.S.C. 5201, 5601))

Sec. 19.99  Spirits in customs custody.

    Spirits in customs custody may be conveyed, when necessary, across 
distilled spirits plant premises if:
    (a) The spirits are not stored or allowed to remain on the premises 
of the distilled spirits plant,
    (b) The spirits are kept separate and apart from other spirits on 
the premises and are moved expeditiously,
    (c) A description of the means and route of conveyance of the 
spirits across the plant premises has been submitted to and approved by 
the regional director (compliance), and
    (d) Consent of surety on the operations or unit bond has been 
furnished by the proprietor, on Form 1533, extending the terms of the 
bond to cover the conveyance of the spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

                          Penalties of Perjury

Sec. 19.100  Execution under penalties of perjury.

    (a) Declaration. When a return, claim, form, or other document 
called for under this part, or in the instructions thereon, is required 
to be executed under penalties of perjury, it shall contain the 
following declaration:
    I declare under the penalties of perjury that this (insert type of 
document, such as report, or claim), including supporting documents, has 
been examined by me and, to the best of my knowledge and belief, is 
true, correct, and complete.

    (b) Signing. The declaration shall bear the signature and title of 
the proprietor or other duly authorized person.

(Act of August 16, 1954, Pub. L. 591--Chapter 736, 68A Stat. 749 (26 
U.S.C. 6065))

Subpart E [Reserved]

                       Subpart F--Location and Use

Sec. 19.131  Restrictions as to locations.

    Distilled spirits plants shall not be located in any dwelling house, 
or in any shed, yard, or enclosure connected with any dwelling house, or 
on board any vessel or boat, or on premises where beer or wine is 
produced, or liquors of any description are retailed, or (except as 
provided in Sec. 19.133) on premises where any other business is 
conducted.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))

Sec. 19.132  Continuity of premises.

    The continuity of the distilled spirits plant shall be unbroken 
except for separations by public waterways, thoroughfares, or carrier 
rights-of-way. However, where there are other separations of the plant 
premises and all parts of the plant premises are in the same general 
location, the Director may approve the registration of the distilled 
spirits plant if he finds no jeopardy to the revenue.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))

Sec. 19.133  Use of distilled spirits plant premises.

    (a) General. No business or operation shall be conducted on the 
premises of a distilled spirits plant other than those authorized in 
accordance with subpart D of this part or those authorized to be carried 
on or conducted by the notice of registration.

[[Page 308]]

    (b) Bonded premises. Bonded premises shall be used exclusively for 
distilled spirits operations. Spirits in packages, cases, or other 
portable containers on bonded premises shall be stored in a room or 
building. However, upon application by the proprietor, the regional 
director (compliance) may approve an alternative method of storage of 
such spirits if such method is suitable for the protection of the 
revenue and the effective administration of this part.
    (c) General premises. General premises are any portion of the 
distilled spirits plant described in the notice of registration other 
than bonded premises. General premises may not be used for any of the 
operations required to be conducted on bonded premises. Business offices 
and service facilities may be included as a part of general premises.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))

Sec. 19.134  Bonded warehouses not on premises qualified for production 
          of spirits.

    (a) Criteria for establishment. (1) A bonded warehouse, other than 
one established on the bonded premises of a distilled spirits plant 
qualified for production of spirits, or contiguous to a distillery 
operated by the warehouseman, may be established if the need therefor is 
clearly shown and the prospective needs of the warehouseman will be for 
the bonded storage of not less than 250,000 wine gallons of bulk 
distilled spirits.
    (2) When commercial bonded warehouses are not available in an area 
and it is impractical to have a warehouse of 250,000 wine gallon 
capacity, the regional director (compliance) may approve the 
establishment of a warehouse without regard to the minimum storage 
requirements.
    (b) Application. (1) The application for registration to establish a 
warehouse shall be accompanied by a separate written application setting 
forth the necessity for the establishment of the warehouse.
    (2) The application shall include:
    (i) Approximate quantity of bulk spirits that will be received, 
stored, and withdrawn annually;
    (ii) Probable number of depositors of spirits;
    (iii) Approximate number of persons to be served from the warehouse; 
and
    (iv) Data or documents indicating the prospective volume of business 
or need for establishment.
    (c) Approval. (1) The regional director (compliance) may approve the 
application for registration if the proposed location of the warehouse 
will not be a jeopardy to the revenue and there is satisfactory evidence 
of the need for establishing a warehouse.
    (2) The regional director (compliance) may also limit the type of 
operation to be conducted at a bonded warehouse established with less 
than the minimum storage requirements.
    (d) Special condition. The proprietor of a warehouse established for 
a limited type of operation shall not, in any manner, expand or change 
his operation to include any other type of operations until, pursuant to 
written application to make such change, he has obtained the approval of 
the regional director (compliance).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178); 
sec. 805a, Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))

          Subpart G--Qualification of Distilled Spirits Plants

Sec. 19.151  General requirements for registration.

    (a) Operations. Except as otherwise provided by law, operations as a 
distiller, warehouseman, or processor may be conducted only on the 
bonded premises of a distilled spirits plant by a person qualified to 
carry out such operations under this subpart.
    (b) Establishment. A distilled spirits plant may be established only 
by a person who intends to conduct at such plant operations as a 
distiller, as a warehouseman, or as both.
    (c) Registration. Each person shall, before commencing operations at 
a distilled spirits plant, make application for and receive notice of 
registration of his plant with respect to such operations as provided in 
this part. Application for registration shall be made on Form 5110.41 to 
the regional director (compliance). Each application shall be executed 
under penalties of perjury,

[[Page 309]]

and all written statements, affidavits, and other documents submitted in 
support of the application or incorporated by reference shall be deemed 
to be a part thereof. The regional director (compliance) may, in any 
instance where the outstanding notice of registration is inadequate or 
incorrect in any respect, require the filing of an application on Form 
5110.41 to amend the notice of registration, specifying the respects in 
which amendment is required. Within 60 days after the receipt of such 
notice, the proprietor shall file such application.

(Sec. 201. Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172); 
sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]

Sec. 19.152  Data for application for registration.

    Application on Form 5110.41 shall include the following information:
    (a) Serial number and statement of purpose for which filed.
    (b) Name and principal business address of the applicant, and the 
location of the distilled spirits plant if different from the business 
address.
    (c) Statement of the type of business organization and of the 
persons interested in the business, supported by the items of 
information listed in Sec. 19.167.
    (d) Statement of the operations to be conducted.
    (e) In respect of the plant to which the Form 5110.41 relates, a 
list of applicant's operating and basic permits, and of the operations, 
withdrawal, or unit bonds (including those filed with the application) 
with the name of the surety or sureties for each bond.
    (f) List of the offices, the incumbents of which are authorized by 
the articles of incorporation or the board of directors to act on behalf 
of the proprietor or to sign the proprietor's name.
    (g) Description of the plant (see Sec. 19.168).
    (h) List of major equipment (see Sec. 19.166).
    (i) Statement of maximum proof gallons that will be produced in the 
distillery during a period of 15 days, stored on bonded premises, and in 
transit to the bonded premises. (Not required if the operations or unit 
bond is in the maximum sum.)
    (j) With respect to any distilled spirits plant which was not 
qualified to operate before June 1, 1985 a certified statement that 
relevant and material accounting records (including regular books of 
account and such other records and data as may be necessary to support 
such records) will be maintained in accordance with generally accepted 
accounting principles which enable the proprietor to file a correct 
distilled spirits tax return or determine whether he is liable for 
distilled spirits taxes.
    (k) Statement of physical security measures employed (see 
Sec. 19.153).
    (l) As applicable, the following:
    (1) With respect to the operations of a distiller:
    (i) Statement of daily producing capacity in proof gallons.
    (ii) Statement of production procedure (see Sec. 19.170).
    (iii) Statement whether spirits will be redistilled.
    (2) With respect to the operations of a warehouseman:
    (i) Description of the system of storage.
    (ii) Statement of bulk storage capacity in wine gallons.
    (3) With respect to the operations of a processor:
    (i) Statement whether bottling operations will be conducted.
    (ii) Statement whether denaturing operations will be conducted.
    (iii) Statement whether articles will be manufactured.
    (iv) Statement whether spirits will be redistilled.
    (v) Description of the system of storage of spirits bottled and 
cased or otherwise packaged or placed in approved containers for removal 
from bonded premises.
    (4) If any other business is to be conducted on the distilled 
spirits plant premises, as provided by subpart D of this part, a 
description of the business, a list of the buildings and/or equipment to 
be used, and a statement as to the relationship, if any, of the business 
to distilled spirits operations at the plant.

If any of the information required by paragraph (c) of this section is 
on file

[[Page 310]]

with the regional director (compliance), that information, if accurate 
and complete, may by incorporation by reference, be made part of the 
application. The applicant shall, when required by the regional director 
(compliance), furnish as a part of the application for registration, 
additional information as may be necessary to determine whether the 
application for registration should be approved.

(68 A Stat. 731, as amended (26 U.S.C. 6001); sec. 201, Pub. L. 85-859, 
72 Stat. 1349, as amended (26 U.S.C. 5172); sec. 805(a), Pub. L. 96-39, 
93 Stat. 275 (26 U.S.C. 5171))

Sec. 19.153  Statement of physical security.

    (a) Content. The statement of security shall include:
    (1) A general description of the physical security at the distilled 
spirits plant, including methods utilized to secure buildings and 
outdoor tanks;
    (2) A statement whether guard personnel are employed;
    (3) A statement whether any electronic or mechanical alarm system is 
used;
    (4) A statement certifying that locks used meet the specifications 
provided in paragraph (e) of Sec. 19.281;
    (5) A list of persons by position or title having responsibility for 
the custody of and access to keys for approved locks used at the 
distilled spirits plant.
    (b) Changes. The proprietor shall file an application for amended 
registration with the regional director (compliance) for any change in 
personnel or procedures contained in the statement of security.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172); 
sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))

Sec. 19.154  Notice of registration.

    The application for registration, when approved, shall constitute 
the notice of registration of the distilled spirits plant. A distilled 
spirits plant shall not be registered or reregistered under this subpart 
until the applicant has complied with all requirements of law and 
regulations relating to the qualification of the business or operations 
in which the applicant intends to engage. A plant shall not be operated 
unless the proprietor has a valid notice of registration covering the 
businesses and operations to be conducted at such plant. In any instance 
where a bond is required to be given or a permit is required to be 
obtained with respect to a business or operation before notice of 
registration of the plant may be received with respect thereto, the 
notice of registration shall not be valid with respect to such business 
or operation in the event that such bond or permit is no longer in 
effect. An application for reregistration shall be filed and notice of 
registration again obtained before engaging in such business or 
operation at such plant. Reregistration is not required when a new bond 
or a strengthening bond is filed pursuant to Sec. 19.246 or 19.247.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172); 
sec. 805a, Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))

Sec. 19.155  Maintenance of registration file.

    The proprietor shall maintain the registration file in looseleaf 
form in complete and current condition, readily available at the plant 
for inspection by ATF officers.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))

Sec. 19.156  Powers of attorney.

    The proprietor shall execute and file with the regional director 
(compliance) a Form 1534 (5000.8) for each person authorized to sign or 
to act on behalf of the proprietor. (Not required for persons whose 
authority is furnished in the application for registration.)

(See 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))

Sec. 19.157  Operating permits.

    (a) General. Except as provided in paragraph (b) of this section, 
each person required to file an application for registration under 
Sec. 19.151 shall make application for and obtain an operating permit 
before commencing any of the following operations:
    (1) Distilling for industrial use.
    (2) Warehousing of spirits for industrial use.
    (3) Denaturing spirits.
    (4) Warehousing of spirits (without bottling) for nonindustrial use.

[[Page 311]]

    (5) Bottling or packaging of spirits for industrial use.
    (6) Manufacturing articles.
    (7) Any other distilling, warehousing, or processing operation not 
required to be covered by a basic permit under the Federal Alcohol 
Administration Act (49 Stat. 978, 27 U.S.C. 203, 204). Application for 
such operating permit shall be made on Form 5110.25 to the regional 
director (compliance).
    (b) Exceptions. The provisions of paragraph (a) of this section 
shall not apply to any agency of a State or political subdivision 
thereof, or to any officer or employee of any such agency acting for the 
agency.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271); 
sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))

Sec. 19.158  Data for application for operating permits.

    Each application on Form 5110.25 shall be executed under the 
penalties of perjury, and all written statements, affidavits, and other 
documents submitted in support of the application shall be deemed to be 
a part thereof. Applications on Form 5110.25 shall include the following 
information:
    (a) Name and principal business address of the applicant.
    (b) Plant address, if different from the business address.
    (c) Description of the operation to be conducted for which an 
operating permit must be obtained.
    (d) Statement of type of business organization and of the persons 
interested in the business, supported by the items of information listed 
in Sec. 19.167.
    (e) Trade names (see Sec. 19.165).
    (f) On specific request of the regional director (compliance), 
furnish a statement as to whether the applicant or any of the persons 
whose names and addresses are required to be furnished under the 
provisions of Sec. 19.167(a)(2) and (c) has ever: (1) Been convicted of 
a felony or misdemeanor under Federal or State law; (2) Been arrested or 
charged with any violation of State or Federal law (convictions or 
arrests or charges for traffic violations need not be reported as to 
paragraphs (f)(1) and (f)(2) of this section, if these violations are 
not felonies); or (3) Applied for, held, or been connected with a 
permit, issued under Federal law to manufacture, distribute, sell or use 
spirits or products containing spirits, whether or not for beverage use, 
or held any financial interest in any business covered by any such 
permit, and, if so, give the number and classification of the permit, 
the period of operation, and state in detail whether the permit was ever 
suspended, revoked, annulled, or otherwise terminated.

Where any of the information required by paragraph (d) or (f)(3) of this 
section is on file with the regional director (compliance), the 
applicant may, by incorporation or by reference, state that the 
information is made a part of the application for an operating permit. 
The applicant shall, when required by the regional director 
(compliance), furnish as a part of his application for an operating 
permit additional information as may be necessary for the regional 
director (compliance) to determine whether the applicant is entitled to 
the permit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271); 
sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))

Sec. 19.159  Issuance of operating permits.

    Only one operating permit will be issued for a plant. The operating 
permit shall designate the operations permitted. All of the provisions 
of this part relating to the performance of the operations covered by 
the permit shall be included in the provisions and conditions of the 
permit. Operating permits shall be kept posted available for inspection 
at the distilled spirits plant.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271); 
sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))

Sec. 19.160  Duration of permits.

    Operating permits are continuing, unless automatically terminated by 
the terms thereof, suspended or revoked as provided in Sec. 19.163, or 
voluntarily surrendered. The provisions of Sec. 19.181 shall be a part 
of the terms and conditions of all operating permits issued under this 
part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))

[[Page 312]]

Sec. 19.161  Denial of permit.

    If, on examination of an application for an operating permit (or on 
the basis of inquiry or investigation), the regional director 
(compliance) has reason to believe that--
    (a) The applicant (including, in the case of a corporation, any 
officer, director, or principal stockholder, and, in the case of a 
partnership, a partner) is, by reason of his business experience, 
financial standing, or trade connections, not likely to maintain 
operations in compliance with 26 U.S.C. Chapter 51, or regulations 
issued thereunder; or
    (b) The applicant has failed to disclose any material information 
required, or has made any false statement, as to any material fact, in 
connection with the application; or
    (c) The premises on which the applicant proposes to conduct the 
operations are not adequate to protect the revenue; the regional 
director (compliance) may institute proceedings for the denial of the 
application in accordance with the procedures set forth in 27 CFR part 
200.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))

Sec. 19.162  Correction of permits.

    Where an error in an operating permit is discovered, the proprietor 
shall, on demand of the regional director (compliance), immediately 
return the permit for correction.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))

Sec. 19.163  Suspension or revocation.

    Whenever the regional director (compliance) has reason to believe 
that any person holding an operating permit--
    (a) Has not in good faith complied with the provisions of 26 U.S.C. 
Chapter 51, or regulations issued thereunder; or
    (b) Has violated conditions of the permit; or
    (c) Has made any false statement as to any material fact in the 
application therefor; or
    (d) Has failed to disclose any material information required to be 
furnished; or
    (e) Has violated or conspired to violate any law of the United 
States relating to intoxicating liquor or has been convicted of any 
offense under Title 26, U.S.C. punishable as a felony or of any 
conspiracy to commit such offense; or
    (f) Has not engaged in any of the operations authorized by the 
permit for a period of more than 2 years; the regional director 
(compliance) may institute proceedings for the revocation or suspension 
of the permit in accordance with the procedures set forth in 27 CFR part 
200.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))

Sec. 19.164  Rules of practice in permit proceedings.

    The regulations in 27 CFR part 200 are made applicable to the 
procedure and practice in connection with the disapproval of any 
application for an operating permit required by this subpart, and in 
connection with the suspension and revocation of such permit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))

Sec. 19.165  Trade names.

    (a) Operating permits. Where a trade name is to be used in 
connection with the operations of a plant for which an operating permit 
is required, the proprietor shall list that trade name on Form 5110.25 
(showing the operations in which each trade name will be used) and the 
offices where the trade name is registered, supported by copies of any 
certificate or other document filed or issued in respect to the trade 
name.
    (b) Basic permits. Where any distilling, warehousing, or processing 
operation is required to be covered by a basic permit under the Federal 
Alcohol Administration Act (49 Stat. 978; 27 U.S.C. 203, 204), 
regulations issued under such Act govern the approval and use of trade 
names for those operations.
    (c) Conditions. Operations shall not be conducted under a trade name 
until the proprietor is in possession of an operating or basic permit 
covering the use of such name.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))

[[Page 313]]

Sec. 19.166  Major equipment.

    The following items of major equipment, if on the plant premises, 
shall be described in the application for registration:
    (a) Tanks (serial number and capacity) used in the production, 
storage and processing of distilled spirits, wine, denatured spirits and 
articles;
    (b) Stills (serial number, kind, capacity and intended use). The 
capacity shall be stated as the estimated maximum proof gallons of 
spirits capable of being produced every 24 hours, or (for column stills) 
may be represented by a statement of the diameter of the base and number 
of plates; and
    (c) Condensers (serial number).

A statement of certification of accurate calibration shall be included 
in the description of tanks that are to be used for gauging distilled 
spirits or wine for any purpose.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1352, as amended 
(26 U.S.C. 5172, 5179))

Sec. 19.167  Organizational documents.

    The supporting information required by paragraph (c) of Sec. 19.152, 
and paragraph (d) of Sec. 19.158, includes, as applicable, copies of--
    (a) Corporate documents. (1) Corporate charter or a certificate of 
corporate existence or incorporation.
    (2) List of directors and officers, showing their names and 
addresses.
    (3) Certified extracts or digests of minutes of meetings of board of 
directors, authorizing certain individuals to sign for the corporation.
    (4) Statement showing the number of shares of each class of stock or 
other evidence of ownership, authorized and outstanding, and the voting 
rights of the respective owners or holders.
    (b) Articles of partnership. Copy of the articles of partnership or 
association, if any, or certificate of partnership or association where 
required to be filed by any State, county, or municipality.
    (c) Statement of interest. (1) Names and addresses of the 10 persons 
having the largest ownership or other interest in each of the classes of 
stock in the corporation, or other legal entity, and the nature and 
amount of the stockholding or other interest of each, whether the 
interest appears in the name of the interested party or in the name of 
another for him. If a corporation is wholly owned or controlled by 
another corporation, those persons of the parent corporation who meet 
the above standards are considered to be the persons interested in the 
business of the subsidiary, and the names thereof need be furnished only 
upon request of the regional director (compliance).
    (2) In the case of an individual owner or partnership, the name and 
address of each person interested in the plant, whether the interest 
appears in the name of the interested party or in the name of another 
for that person.
    (d) Availability of additional corporate documents. The originals of 
documents required to be submitted under this section and additional 
documents which may be required by the regional director (compliance) 
such as the articles of incorporation, bylaws, and State certificate 
authorizing operations shall be made available to any ATF officer upon 
request.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271))

Sec. 19.168  Description of plant.

    (a) The application for registration shall include a description of 
each tract of land comprising the distilled spirits plant.
    (b) The description shall:
    (1) Clearly indicate the bonded premises and any general premises 
included as part of the distilled spirits plant; and
    (2) Contain directions and distances in sufficient detail to enable 
ATF officers to readily determine the boundaries of the plant.
    (c) Each building and outside tank used for the production, storage 
and processing of spirits, denatured spirits, articles, or wines shall 
be described by location, size, construction, and arrangement with 
reference to each by its designated number or letter.
    (d) If a plant includes a room or floor in a building, a description 
of the building in which the room or floor is situated and its location 
shall be given.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))

[[Page 314]]

Sec. 19.169  Registry of stills.

    The provisions of subpart C of part 170 of this chapter are 
applicable to stills or distilling apparatus located on plant premises 
used for distilling. As provided under Sec. 170.55, the listing of a 
still in the application for registration, and approval of the 
application, constitutes registration of the still.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1355, as amended 
(26 U.S.C. 5172, 5179))

[T.D. ATF-207, 50 FR 23681, June 5, 1985]

Sec. 19.170  Statement of production procedure.

    The statement of production procedure in the application for 
registration shall set forth a step-by-step description of the procedure 
employed to produce spirits from an original source, commencing with the 
treating, mashing, or fermenting of the raw materials or substances and 
continuing through each step of the distilling, purifying and refining 
procedure to the production gauge. The kind and approximate quantity of 
each material or substance used in producing, purifying, or refining 
each type of spirits shall be shown.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))

                  Changes After Original Qualification

Sec. 19.180  Application for amended registration.

    Where there is a change with respect to the information shown in the 
notice of registration, the proprietor shall submit, within 30 days of 
such change (except as otherwise provided in this subpart), an 
application on Form 5110.41 for amended registration. Such application 
shall set forth, on sheets appropriately numbered or otherwise 
identified, the information necessary to make the notice of registration 
accurate and current. Where the change affects only pages or parts of 
pages of the notice of registration, such complete pages shall be 
submitted as will enable the replacement of the pages affected and 
maintenance of the file as provided in Sec. 19.155.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172); 
sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))

Sec. 19.181  Automatic termination of permits.

    (a) Permits not transferable. Operating permits issued under this 
part shall not be transferred. In the event of the lease, sale, or other 
transfer of such a permit, or of the operations authorized thereby, the 
permit shall thereupon automatically terminate.
    (b) Corporations. In the case of a corporation holding an operating 
permit under this part, if actual or legal control of the permittee 
corporation changes, directly or indirectly, whether by reason of change 
in stock ownership or control (in the permittee corporation or in any 
other corporation), by operation of law, or in any other manner, such 
permit may remain in effect with respect to the operation covered 
thereby until the expiration of 30 days after such change, whereupon 
such permit shall automatically terminate. However, if within such 30 
day period an application for a new permit covering such operation is 
made, then the outstanding operating permit may remain in effect with 
respect to the continuation of the operation covered thereby until final 
action is taken on such application. When such final action is taken, 
such outstanding operting permit shall thereupon automatically 
terminate.
    (c) Basic permits. The termination of basic permits is governed by 
the provisions of 27 CFR part 1.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))

Sec. 19.182  Change in name of proprietor.

    Where there is to be a change in the individual, firm, or corporate 
name, the proprietor shall file application to amend the registration 
and to amend the operating and/or basic permit; a new bond or consent of 
surety will not be required. Operations may not be conducted under the 
new name prior to approval of the amended registration and issuance of 
the amended permit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271))

[[Page 315]]

Sec. 19.183  Change of trade name.

    If there is to be a change in, or addition of, a trade name, the 
proprietor shall file application to amend the operating and/or basic 
permit; a new bond or consent of surety will not be required. Operations 
may not be conducted under the new trade name prior to issuance of the 
amended permit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended, (26 U.S.C. 5271))

Sec. 19.184  Changes in stockholders.

    Changes in the list of stockholders furnished under the provisions 
of Sec. 19.167(c)(1) may, in lieu of submission within 30 days of the 
change under the provisions of Sec. 19.180, be submitted annually by the 
proprietor on May 1 or other date approved by the regional director 
(compliance), except where the sale or transfer of capital stock results 
in a change in the control or management of the business.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271))

Sec. 19.185  Changes in officers and directors.

    Where there is any change in the list of officers and directors 
furnished under the provisions of Sec. 19.167(a)(2), the proprietor 
shall submit, within 30 days of any such change, an application on Form 
5110.41 for amended registration, supported by a new list of officers 
and directors and a statement of the changes reflected in such list. 
Where the proprietor has shown to the satisfaction of the regional 
director (compliance) that certain corporate officers listed on the 
original appplication have no responsibilities in connection with the 
operations covered by the registration, the regional director 
(compliance) may waive the requirements for submitting applications for 
amended registration to cover changes of such corporate officers.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, (26 U.S.C. 5172); 
sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))
[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]

Sec. 19.186  Change in proprietorship.

    (a) General. If there is a change in the proprietorship of a plant 
qualified under this part, the outgoing proprietor shall comply with the 
requirements of Sec. 19.211, and the successor shall, before commencing 
operations, apply for and obtain the required permits, file the required 
bonds, and file application for and receive notice of registration of 
the plant in the same manner as a person qualifying as the proprietor of 
a new plant, except that the successor may, in the manner provided in 
Sec. 19.187, adopt the approved formulas (5150.9) of the predecessor. 
Spirits may be transferred from an outgoing proprietor of a plant to a 
successor in the manner provided in Sec. 19.201.
    (b) Fiduciary. If the successor to the proprietorship of a plant is 
an administrator, executor, receiver, trustee, assignee or other 
fiduciary, he shall comply with the provisions of paragraph (a) of this 
section except that he may, in lieu of filing a new bond, furnish 
consent of surety extending the terms of the predecessor's bond, and he 
may also incorporate by reference in the application for registration on 
Form 5110.41 any pertinent information contained in the predecessor's 
notice of registration. The fiduciary shall furnish a certified copy of 
the order of the court or other pertinent document showing qualification 
as such fiduciary. The effective dates of the qualifying documents filed 
by the fiduciary shall be the effective date of the court order, or the 
date specified therein for him to assume control. If the fiduciary was 
not appointed by a court, the date of assuming control shall coincide 
with the effective date of the qualifying documents filed by the 
fiduciary.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9160, Mar. 6, 1985; 50 FR 20099, May 14, 1985]

Sec. 19.187  Adoption of formulas.

    (a) Forms 5110.38. The adoption by a successor of approved Forms 
5110.38 (27-B Supplemental) shall be in the form of an application, 
filed with the Director. The application shall list the

[[Page 316]]

formulas for adoption by (1) formula number, (2) name of product, and 
(3) date of approval. The application shall clearly show that the 
predecessor has authorized the use of its previously approved formulas 
by the successor.
    (b) Form 5150.19. The adoption by a successor of approved Form 
5150.19 (or previously approved Form 1479-A) shall be in accordance with 
Sec. 20.63 of this chapter.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9160, Mar. 6, 1985]

Sec. 19.188  Partnerships.

    If under the laws of the particular State, the partnership is not 
terminated on death or insolvency of a partner, but continues until the 
winding up of the partnership affairs is completed, and the surviving 
partner has the exclusive right to the control and possession of the 
partnership assets for the purpose of liquidation and settlement, such 
surviving partner may continue to operate the plant under the prior 
qualification of the partnership, provided a consent of surety is filed, 
wherein the surety and the surviving partner agree to remain liable on 
the operations or unit bond. If such surviving partner acquires the 
business on completion of the settlement of the partnership, he shall 
qualify in his own name from the date of acquisition, as provided in 
Sec. 19.186(a). The rule set forth in this section shall also apply 
where there is more than one surviving partner.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))

Sec. 19.189  Change in location.

    Where there is a change in the location of the plant, the proprietor 
shall file applications to amend the registration of the plant and the 
operating and/or basic permit, and either a new bond or a consent of 
surety on Form 1533. Operation of the plant may not be commenced at the 
new location prior to approval of the amended registration and issuance 
of the amended permit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349 as amended, 1370, as amended 
(26 U.S.C. 5172, 5271); sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 
U.S.C. 5173))

Sec. 19.190  Changes in premises.

    Except as provided in Secs. 19.202, 19.203, 19.204, and 19.205, 
where bonded premises, or any other premises included as a part of the 
plant are to be extended or curtailed, the proprietor shall file an 
application for registration, Form 5110.41, to cover such extension or 
curtailment. Premises and equipment to be included by extension or to be 
excluded by curtailment shall not, prior to approval by the regional 
director (compliance) of the requried documents, be used for other than 
previously approved purposes.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))

Sec. 19.191  Change in operations.

    If the proprietor proposes to conduct a new business or operation 
involving spirits, he shall file applications to amend the registration 
of the plant and the operating and/or basic permit. If the proprietor 
desires to engage, on the plant premises, in other businesses, as 
provided in subpart D, he shall submit an application to amend the 
registration of the plant to include the information required under 
Sec. 19.152(l)(4). The additional operation or business may not be 
carried on prior to approval of the amended registration and (if 
required) issuance of the amended permit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271); sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 
U.S.C. 5171))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]

Sec. 19.192  Change in production procedure.

    If the proprietor desires to produce a new product or make a change 
in a production procedure which would affect the designation, or 
substantially affect the character of his product, the proprietor shall 
file an application to amend the registration of the plant to include 
the amended or new statement of production procedure. The new or changed 
procedure may not be used

[[Page 317]]

prior to approval of the amended registration.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, (26 U.S.C. 5172))

Sec. 19.193  Changes in construction or use of buildings and equipment.

    (a) Changes. When a material change, affecting the accuracy of the 
notice of registration, is to be made in the construction or use of 
buildings or equipment of a plant, other than a change covered by 
Secs. 19.190, 19.202, 19.203, 19.204, or 19.205, the proprietor shall, 
before making such change, submit a letterhead notice to the regional 
director (compliance) through the area supervisor.
    (b) Letterhead notice. The letterhead notice shall:
    (1) Describe the proposed change in detail;
    (2) Be kept on file with the proprietor's current notice of 
registration; and
    (3) After completion of the change, be incorporated in the next 
amendment of the notice of registration on Form 5110.41, unless the 
regional director (compliance) requires immediate amendment.
    (c) Emergency changes. The proprietor may make emergency material 
changes without prior notification, but when such emergency changes are 
made, the proprietor shall promptly report such changes to the area 
supervisor.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, (26 U.S.C. 5172))

                  Operations by Alternating Proprietors

Sec. 19.201  Procedure for alternating proprietors.

    (a) General. A plant, or any part thereof which is suitable for 
qualification as a separate plant, may be operated alternately by 
proprietors who have filed and received approval of the necessary bonds 
and applications for registration, and have otherwise qualified under 
the provisions of this subpart. Where operations by alternating 
proprietors are limited to parts of the plant, the notice of 
registration shall describe the areas, rooms or buildings or combination 
thereof, which will be alternated, and shall be accompanied by special 
diagrams designating the parts of the plant which are to be alternated. 
A special diagram shall be submitted for each arrangement under which 
the premises will be operated. Once such qualifying documents have been 
approved, and initial operations have been conducted thereunder, the 
plant, or parts thereof, may be alternated by the proprietor filing 
notices on Form 5110.34 with the regional director (compliance). Any 
transfer of spirits, idenatured spirits, and wines shall be indicated on 
Form 5110.34 filed by each proprietor.
    (b) Production. Distilling materials and unfinished spirits in any 
bonded areas, rooms or buildings to be alternated shall be processed to 
completion by the outgoing proprietor unless transferred to the incoming 
proprietor. All finished spirits shall be marked and removed by the 
outgoing proprietor in the name in which produced, before production 
gauge is made of any spirits by the incoming proprietor.
    (c) Storage. Spirits and wines in any bonded areas, rooms, or 
buildings to be alternated shall be transferred in bond to the incoming 
proprietor. The outgoing proprietor shall execute a consent of surety on 
Form 1533 (5000.18) to continue in effect the operations or unit bond 
whenever operation of the areas, rooms, or buildings is to be resumed by 
him following suspension of operations by an alternate proprietor.
    (d) Processing. Spirits, denatured spirits, wines and articles in 
any rooms, areas, or buildings to be alternated shall be processed to 
completion and removed from the affected areas, rooms, or buildings by 
the outgoing proprietor prior to the effective date and hours given in 
the notice unless transferred or retained in locked tanks as provided in 
this paragraph. Spirits, denatured spirits, and wines may be transferred 
to the incoming proprietor. Further, the outgoing proprietor shall 
execute a consent of surety on Form 1533 (5000.18) to continue in effect 
the operations or unit bond whenever operation of the affected areas, 
rooms, or buildings is to be resumed by him following suspension of 
operations by the alternate proprietor. Denatured spirits and articles 
may be retained in tanks

[[Page 318]]

locked by approved locks, the keys to which are in the custody of the 
outgoing proprietor. In this case, the outgoing proprietor shall execute 
a consent of surety on Form 1533 (5000.18) to continue liability on the 
operations or unit bond for the tax on such denatured spirits or 
articles retained in such tanks, notwithstanding the change in 
proprietorship.
    (e) Records. Each proprietor shall maintain separate records and 
submit separate reports. Records kept by the outgoing proprietor for 
spirits, wines, and alcoholic flavoring materials may be used by the 
incoming proprietor. All transfers of distilling materials, unfinished 
spirits, spirits, denatured spirits, and wines shall be reflected in the 
records of each proprietor.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271))

                          Alternate Operations

Sec. 19.202  Alternate use of premises and equipment for customs 
          purposes.

    (a) General. The premises of a distilled spirits plant may, as 
provided in this section, be alternately curtailed and extended to 
permit the facilities of the distilled spirits plant to be used 
temporarily by customs officers, under applicable customs law and 
regulations, for the purpose of gauging or processing distilled spirits. 
The use of the excluded portion of the premises for customs purposes is 
subject to the approval of the district director of customs. When it is 
necessary to convey spirits in customs custody across the premises of a 
distilled spirits plant, the proprietor shall comply with the provisions 
of Sec. 19.99. When a portion of the distilled spirits plant premises is 
first to be excluded as provided in this section, the proprietor shall 
file with the regional director (compliance) (1) an application for 
registration, Form 5110.41, to cover alternate curtailment and extension 
of premises, and (2) a special diagram, in duplicate, delineating the 
premises as they will exist, both during extension and curtailment, and 
clearly depicting all buildings, floors, rooms, areas, equipment and 
spirits lines (identified individually by letter or number) which are to 
be subject to alternation, in their relative operating sequence. Once 
such qualifying documents have been approved by the regional director 
(compliance), the designated premises and equipment may be alternately 
curtailed or extended pursuant to notice on Form 5110.34. Portions of 
the premises to be excluded by curtailment or included by extension 
shall not be used for purposes other than as set forth in the current 
notice. The proprietor shall remove all spirits from the premises or 
equipment affected by the notice prior to the effective date and hours 
of the notice. However, on release by customs, spirits being transferred 
to bonded premises under 26 U.S.C. 5232, may remain on the premises to 
be reincluded in bonded premises.
    (b) Separation of premises. The portion of the premises which is to 
be excluded from the distilled spirits plant premises as provided in 
this section shall be separated from the remaining portion of the 
distilled spirits plant premises in a manner which satisfies the 
regional director (compliance) that the revenue will not be jeopardized.
    (c) Exception. Notwithstanding the provisions of paragraphs (a) and 
(b) of this section, the bonded premises may be used temporarily without 
filing Form 5110.41 or Form 5110.34, for the sole purpose of gauging 
bulk distilled spirits to effect their transfer from customs custody to 
ATF bond.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1358, as amended 
(26 U.S.C. 5172, 5178))

Sec. 19.203  Alternation of distilled spirits plant and bonded wine 
          cellar premises.

    (a) General. A proprietor of a distilled spirits plant operating a 
contiguous bonded wine cellar desiring to alternate the use of each 
premises by extension and curtailment shall file necessary qualifying 
documents with the regional director (compliance).
    (b) Qualifying documents. The proprietor shall file with the 
regional director (compliance):
    (1) Form 5110.41 and Form 5120.25 to cover the proposed alternation 
of premises;
    (2) A special diagram, in duplicate, delineating the premises as 
they will

[[Page 319]]

exist, both during extension and curtailment and clearly depicting all 
buildings, floors, rooms, areas, equipment and spirits lines (identified 
individually by letter or number) which are to be subject to 
alternation, in their relative operating sequence; and
    (3) Evidence of existing bond, consent of surety, or a new bond to 
cover the proposed alternation of premises.
    (c) Proprietor's responsibility. After approval of qualifying 
documents for the alternation of premises, and after initial operations 
have been conducted thereunder, the proprietor shall execute Form 
5110.34 each time the premises are alternated. Prior to the effective 
hour of the date shown on the Form 5110.34, the proprietor shall remove 
all spirits, denatured spirits, articles, and wines from the distilled 
spirits plant premises alternated to bonded wine cellar premises. Any 
wine on bonded wine cellar premises shall be removed prior to 
alternation to distilled spirits plant premises unless wine is being 
simultaneously transferred in bond to the distilled spirits plant.
    (d) Separation of premises. Separation of distilled spirits plant 
premises from bonded wine cellar premises after alternation shall be in 
a manner which satisfies the regional director (compliance) that the 
revenue will not be jeopardized.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended 
(26 U.S.C. 5172, 5178))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-344, 58 
FR 40354, July 28, 1993]

Sec. 19.204  Alternation of distilled spirits plant and taxpaid wine 
          bottling house premises.

    (a) General. A proprietor of a distilled spirits plant operating a 
contiguous taxpaid wine bottling house desiring to alternate the use of 
each premises by extension and curtailment shall file necessary 
qualifying documents with the regional director (compliance).
    (b) Qualifying documents. The proprietor shall file with the 
regional director (compliance):
    (1) Form 5110.41 and Form 5120.25 to cover the proposed alternation 
of premises;
    (2) A special diagram, in duplicate, delineating the premises as 
they will exist, both during extension and curtailment and clearly 
depicting all buildings, floors, rooms, areas, equipment and spirits 
lines (identified individually by letter or number) which are to be 
subject to alternation, in their relative operating sequence; and
    (3) Evidence of existing bond, consent of surety, or a new bond to 
cover the proposed alternation of premises.
    (c) Proprietor's responsibility. After approval of qualifying 
documents for the alternation of premises, and after initial operations 
have been conducted thereunder, the proprietor shall execute Form 
5110.34 each time the premises are alternated. Prior to the effective 
hour of the date shown on the Form 5110.34, the proprietor shall remove 
all spirits, denatured spirits, articles, and wines from the distilled 
spirits plant premises alternated to taxpaid wine bottling house 
premises. Any wine on taxpaid wine bottling house premises shall be 
removed prior to alternation to distilled spirits plant premises.
    (d) Separation of premises. Separation of distilled spirits plant 
premises from taxpaid wine bottling house premises after alternation 
shall be in a manner which satisfies the regional director (compliance) 
that the revenue will not be jeopardized.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended 
(26 U.S.C. 5172, 5178))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-344, 58 
FR 40354, July 28, 1993]

Sec. 19.205  Alternate curtailment and extension of bonded premises for 
          use as general premises.

    (a) General. The premises of a distilled spirits plant may, as 
provided in this section, be alternately curtailed and extended to 
permit the bonded premises of the distilled spirits plant to be used 
temporarily as general premises, or to permit the general premises of a 
distilled spirits plant to be used temporarily as bonded premises.
    (b) Qualifying documents. When a portion of the distilled spirits 
plant premises is first to be curtailed or extended

[[Page 320]]

as provided in this section, the proprietor shall file with the regional 
director (compliance)--
    (1) An application for registration, Form 5110.41, to cover 
alternate extension and curtailment of the premises, and
    (2) A special diagram, in duplicate, delineating the premises as 
they will exist, both during extension and curtailment, and clearly 
depicting all buildings, floors, rooms, areas, equipment and spirits 
lines (identified individually by letter or number) which are to be 
subject to alternation, in their relative operating sequence.
    (c) Proprietor's responsibility. Once such qualifying documents have 
been approved by the regional director (compliance), the designated 
premises and equipment may be alternately curtailed or extended pursuant 
to notice on Form 5110.34. Portions of the premises to be excluded by 
curtailment or included by extension shall not be used for purposes 
other than as set forth in the current notice. The proprietor shall 
remove all spirits, denatured spirits, articles, and wines from the 
premises or equipment affected by the notice prior to the effective date 
and hour of the notice, except that--
    (1) Bonded spirits on portions of bonded premises that are to be 
curtailed to general premises need not be removed if the spirits are 
taxpaid concurrent with the filing of Form 5110.34 to effect 
curtailment; and
    (2) Taxpaid spirits on portions of general premises to be curtailed 
to bonded premises need not be removed if the spirits are to be 
immediately dumped and returned to bond under the provisions of subpart 
U of this part.
    (d) Separation of premises. The portion of the premises which is to 
be curtailed or extended as provided in this section shall be separated 
from the remaining portion of the distilled spirits plant in a manner 
which satisfies the regional director (compliance) that the revenue will 
not be jeopardized.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended 
(26 U.S.C. 5172, 5178))

Sec. 19.206  Curtailment and extension of plant premises for the 
          manufacture of eligible flavors.

    (a) General. The premises of a distilled spirits plant may be 
alternately curtailed and extended, as provided in this section, to 
permit the use of the facilities for the manufacture of eligible 
flavors.
    (b) Qualifying documents. When a portion of the distilled spirits 
plant premises is first to be curtailed or extended as provided in this 
section, the proprietor shall file with the regional director 
(compliance)--
    (1) An application for registration, Form 5110.41, to cover 
alternate extension and curtailment of the premises, and
    (2) A special diagram, in duplicate, delineating the premises as 
they will exist, both during extension and curtailment, and clearly 
depicting all buildings, floors, rooms, areas, equipment and spirits 
lines (identified individually by letter or number) which are to be 
subject to alternation, in their relative operating sequence.
    (c) Proprietor's responsibility. Once such qualifying documents have 
been approved by the regional director (compliance), the designated 
premises and equipment may be alternately curtailed or extended pursuant 
to notice on Form 5110.34. Portions of the premises to be excluded by 
curtailment or included by extension shall not be used for purposes 
other than as set forth in the current notice. The proprietor shall 
remove all spirits, denatured spirits, articles, and wines from the 
premises or equipment which are to be curtailed from bonded premises or 
are to be included by extension of bonded premises prior to the 
effective date and hour of the notice, except that--
    (1) Bonded spirits on portions of bonded premises that are to be 
curtailed need not be removed if the spirits are taxpaid concurrent with 
the filing of Form 5110.34 to effect curtailment; and
    (2) Taxpaid spirits which are on portions of premises to be included 
by extension of bonded premises and which have not been used in the 
manufacture of a nonbeverage product need not be removed if the spirits 
are to be dumped immediately and returned to bond

[[Page 321]]

under the provisions of subpart U of this part.
    (d) Separation of premises. The portion of the premises which is to 
be curtailed or extended as provided in this section shall be separated 
from the remaining portion of the distilled spirits plant in a manner 
which satisfies the regional director (compliance) that the revenue will 
not be jeopardized.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended 
(26 U.S.C. 5172, 5178))

[T.D. ATF-297, 55 FR 18063, Apr. 30, 1990]

                  Permanent Discontinuance of Business

Sec. 19.211  Notice of permanent discontinuance.

    When the proprietor permanently discontinues any or all of the 
operations listed in the notice of registration, he shall file a Form 
5110.41 to show the discontinuance. Form 5110.41 shall be accompanied 
(a) by all permits issued to the proprietor under this subpart covering 
the discontinued operations, and by the proprietor's request that such 
permits be canceled; (b) by the proprietor's written statement 
disclosing, as applicable, whether (1) all spirits, denatured spirits, 
articles, wines, liquor bottles, and other pertinent items have been 
lawfully disposed of, (2) any spirits, denatured spirits, wines, or 
liquor bottles are in transit to the premises, (3) all approved 
applications for transfer of spirits and denatured spirits to the 
premises have been secured and returned to the regional director 
(compliance) for cancellation; and (c) by pertinent reports coverning 
the discontinued operations (each report shall be marked ``Final 
Report'').

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271))

[T.D. ATF-206, 50 FR 23951, June 7, 1985]

                 Subpart H--Bonds and Consents of Surety

Sec. 19.231  Filing of operations or unit bonds.

    Every person intending to establish a distilled spirits plant shall 
file an operations or unit bond as prescribed in this subpart, covering 
distilled spirits operations at such plant, with the regional director 
(compliance), at the time of filing the original application for 
registration of the plant, and at such other times as are required by 
this part. Such bond shall be conditioned that he shall faithfully 
comply with all provisions of law and regulations relating to activities 
covered by such bond, will pay all taxes imposed by 26 U.S.C. Chapter 
51, and shall pay all penalties incurred or fines imposed for violation 
of any such provisions. The regional director (compliance) may require, 
in connection with any operations or unit bond, a statement, executed 
under the penalties of perjury, as to whether the principal or any 
person owning, controlling, or actively participating in the management 
of the business of the principal has been convicted of or has 
compromised any offense set forth in Sec. 19.237(a)(1) or has been 
convicted of any offense set forth in Sec. 19.237(a)(2). In the event 
the above statement contains an affirmative answer, the applcant shall 
submit a statement describing in detail the circumstances surrounding 
such conviction or compromise. No person shall comence or continue 
distilled spirits operations at such plant unless he has a valid 
operations or unit bond (and consent of surety, if necessary), as 
required in respect of such operations by this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended (26 U.S.C. 5551); 
sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]

Sec. 19.232  Additional condition of operations bond.

    In addition to the requirements of Sec. 19.231, the operations bond 
shall be conditioned on payment of the tax now or hereafter in force, 
except as provided by law, including taxes on all unexplained shortages 
of bottled distilled spirits.

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

Sec. 19.233  Corporate surety.

    (a) Surety bonds required by this part may be given only with 
corporate

[[Page 322]]

sureties holding certificates of authority from, and subject to the 
limitations prescribed by, the Secretary as set forth in the current 
revision of Treasury Department Circular 570 (Companies Holding 
Certificates of Authority as Acceptable Sureties on Federal Bonds and as 
Acceptable Reinsuring Companies).
    (b) Treasury Department Circular No. 570 is published in the Federal 
Register yearly as of the first workday of July. As they occur, interim 
revisions of the circular are published in the Federal Register. Copies 
may be obtained from the Audit Staff, Bureau of Government Financial 
Operations, Department of the Treasury, Washington, DC 20226.

(Ch. 390, Pub. L. 80-280, 61 Stat. 648 as amended (31 U.S.C. 9304, 
9306))

Sec. 19.234  Deposit of securities in lieu of corporate surety.

    In lieu of corporate surety, the principal may pledge and deposit, 
as surety for his bond, securities which are transferable and are 
guaranteed as to both interest and principal by the United States, in 
accordance with the provisions of 31 CFR part 225.

(Ch. 390, Pub. L. 80-280, 61 Stat. 650 (31 U.S.C. 9301, 9303))

Sec. 19.235  Consents of surety.

    Consents of surety to changes in the terms of bonds shall be 
executed on Form 1533 by the principal and by the surety with the same 
formality and proof of authority as is required for the execution of 
bonds.

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

Sec. 19.236  Filing and execution of powers of attorney.

    (a) Filing. Each bond, and each consent to changes in the terms of a 
bond, shall be accompanied by a power of attorney authorizing the agent 
or officer who executed the bond or consent to so act on behalf of the 
surety. The regional director (compliance) who is authorized to approve 
the bond may require additional evidence of the authority of the agent 
or officer to execute the bond or consent.
    (b) Execution. The power of attorney shall be prepared on a form 
provided by the surety company and executed under the corporate seal of 
the company. If the power of attorney submitted is other than a manually 
signed original, it shall be accompanied by certification of its 
validity.

(Ch. 390, Pub. L. 80-280, 61 Stat. 648 (31 U.S.C. 9304, 9306))

Sec. 19.237  Disapproval of bonds or consents of surety.

    (a) Disapproval. The regional director (compliance) may disapprove 
any bond or consent of surety submitted in respect to the operations of 
a distiller, warehouseman, or processor, if the principal or any person 
owning, controlling, or actively participating in the management of the 
business of the principal shall have been previously convicted, in a 
court of competent jurisdiction of--
    (1) Any fraudulent noncompliance with any provision of any law of 
the United States, if such provision related to internal revenue or 
customs taxation of spirits, wines, or beer, or if such an offense shall 
have been compromised with the person on payment of penalties or 
otherwise, or
    (2) Any felony under a law of any State or the District of Columbia, 
or the United States, prohibiting the manufacture, sale, importation, or 
transportation of spirits, wine, beer, or other intoxicating liquor.
    (b) Appeal. Where a bond or consent of surety is disapproved by the 
regional director (compliance), the person giving the bond may appeal to 
the Director, who will hear such appeal. The decision of the Director 
shall be final.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended (26 U.S.C. 5551))

Secs. 19.238-19.240  [Reserved]

Sec. 19.241  Operations bond--distilled spirits plant and adjacent 
          bonded wine cellar.

    (a) General. A wine cellar under the provisions of 27 CFR part 24 
shall be treated as being adjacent to a distilled spirits plant if--
    (1) Such distilled spirits plant is qualified under subpart G for 
the production of distilled spirits; and

[[Page 323]]

    (2) Such wine cellar and distilled spirits plant are operated by the 
same person (or in the case of a corporation, by such corporation and 
its controlled subsidiaries). For the purpose of this section a 
controlled subsidiary is a corporation where more than 50 percent of the 
voting power is controlled by the parent corporation.
    (b) Bond in lieu of wine cellar bond. In the case of an adjacent 
bonded wine cellar, a bond furnished under this subpart which covers 
operations at such bonded wine cellar shall be in lieu of any bond which 
would otherwise be required under 26 U.S.C. 5354 with respect to such 
wine cellar (other than supplemental bonds required under the second 
sentence of 26 U.S.C. 5354) and the operations bond listed in 
Sec. 19.245(a)(1).
    (c) Liability. Bonds given under this section shall contain the 
terms and conditions of the bonds in lieu of which they are given. The 
total amount of such operations bond shall be available for the 
satisfaction of any liability incurred under the terms or conditions of 
such bond.

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-299, 55 
FR 24989, June 19, 1990]

Sec. 19.242  Area operations bond.

    Any person (or, in the case of a corporation, a corporation and its 
controlled subsidiaries) operating more than one plant in a region may 
give an area operations bond covering the operation of any two or more 
of such plants, and any bonded wine cellars which are adjacent to such 
plants and which otherwise could be covered by an operations bond. For 
the purpose of this section, a controlled subsidiary is a corporation 
where more than 50 percent of the voting power is controlled by the 
parent corporation. Bonds given under this section shall be in lieu of 
the bonds which would be required under Sec. 19.245(a) and shall contain 
the terms and conditions of such bonds. If the area operations bond 
covers the operations of more than one corporation, each corporation 
shall be shown as principal, and the bond shall be signed for each 
corporation. The total amount of the area operations bond shall be 
available for the satisfaction of any liability incurred under the terms 
or conditions of such bond.

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

Sec. 19.243  Withdrawal bond.

    Any person (or, in the case of a corporation, a corporation and its 
controlled subsidiaries) operating one or more distilled spirits plants 
within a region and who intends to withdraw spirits from bond on 
determination, but before payment, of the tax shall, before making any 
such withdrawal, furnish a withdrawal bond to secure payment of the tax 
on all spirits so withdrawn. Such bond shall be in addition to the 
operations bond, and if the distilled spirits are withdrawn under the 
withdrawal bond, the operations bond shall no longer cover liability for 
payment of the tax on the spirits withdrawn. For the purpose of this 
section, a controlled subsidiary is a corporation where more than 50 
percent of the voting power is controlled by the parent corporation. The 
bond, if it covers more than one plant, shall show as to each plant 
covered by the bond the part of the total sum which represents the penal 
sum (computed in accordance with Sec. 19.245) for each such plant. If 
the penal sum of the bond covering a plant, or the penal sum allocated 
to any plant (where the bond covers more than one plant), is in an 
amount less than the maximum prescribed in Sec. 19.245, withdrawals from 
such plant shall not exceed the quantity permissible, as reflected by 
the penal sum in the bond for such plant. Such withdrawal bond shall be 
conditioned that the total amount of the bond shall be available for 
satisfaction of any liability incurred under the terms and conditions of 
such bond.

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

Sec. 19.244  Unit bond.

    Any person (or, in the case of a corporation, a corporation and its 
controlled subsidiaries) who would otherwise be required to give bonds 
for both operations at one or more distilled spirits plants (and any 
adjacent bonded

[[Page 324]]

wine cellars) and withdrawals from one or more distilled spirits plants 
within a reigon may, in lieu of furnishing separate bonds for operations 
and withdrawals, furnish a unit bond containing the terms and conditions 
of the bonds in lieu of which it is given. For the purpose of this 
section, a controlled subsidiary is a corporation where more than 50 
percent of the voting power is controlled by the parent corporation. The 
unit bond shall show as to each plant covered by the bond the part of 
the total sum which represents the penal sum (computed in accordance 
with Sec. 19.245) for operations at and withdrawals from each plant. If 
the penal sum of the bond covering a plant, or the penal sum allocated 
to any plant (if the bond covers more than one plant), is in an amount 
less than the maximum prescribed in Sec. 19.245, operations at and/or 
withdrawals from such plant shall not exceed the quantity permissible as 
reflected by the penal sum in the bond for such plant. The unit bond 
shall be conditioned that the total amount of the bond shall be 
available for satisfaction of any liability incurred under the terms and 
conditions of such bond.

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

Sec. 19.245  Bonds and penal sums of bonds.

    The bonds, and the penal sums thereof, required by this subpart, are 
as follows:

                                                    Penal Sum
----------------------------------------------------------------------------------------------------------------
                 Type of bond                                    Basis                    Minimum      Maximum
----------------------------------------------------------------------------------------------------------------
(a) Operations bond:
  (1) One plant bond--
    (i) Distiller.............................  The amount of tax on spirits produced        $5,000     $100,000
                                                 during a period of 15 days.
    (ii) Warehouseman:
      (A) General.............................  The amount of tax on spirits and wines        5,000      200,000
                                                 deposited in, stored on, and in
                                                 transit to bonded premises.
      (B) Limited to storage of spirits in      ......do..............................        5,000       50,000
       packages to a total of not over 50,000
       proof gallons.
    (iii) Distiller and warehouseman..........  The amount of tax on spirits produced        10,000      200,000
                                                 during a period of 15 days, and the
                                                 amount of tax on spirits and wines
                                                 deposited, in stored on, and in
                                                 transit to bonded premises.
    (iv) Distiller and processor..............  The amount of tax on spirits produced        10,000      200,000
                                                 during a period of 15 days, and the
                                                 amount of tax on spirits, denatured
                                                 spirits, articles, and wines
                                                 deposited in, stored on, and in
                                                 transit to bonded premises.
    (v) Warehouseman and processor:
      (A) General.............................  The amount of tax on spirits,                10,000      250,000
                                                 denatured spirits, articles, and
                                                 wines deposited in, stored on, and in
                                                 transit to bonded premises.
      (B) Limited to storage of spirits or      ......do..............................       10,000       50,000
       denatured spirits in packages to a
       total of not over 50,000 proof gallons,
       and processing of spirits or denatured
       spirits so stored.
    (vi) Distiller, warehouseman, and           The amount of tax on spirits produced        15,000      250,000
     processor.                                  during a period of 15 days, and the
                                                 amount of tax on spirits, denatured
                                                 spirits, articles, and wines
                                                 deposited in, stored on, and in
                                                 transit to bonded premises.
  (2) Adjacent bonded wine cellars--
    (i) Distiller and bonded wine cellar......  The sum of the amount of tax                  6,000      150,000
                                                 calculated in (a)(1)(i) and with
                                                 respect to bonded wine cellar
                                                 operations, the amount of tax on
                                                 wines and wine spirits possessed and
                                                 in transit.

[[Page 325]]


    (ii) Distiller, warehouseman and bonded     The sum of the amount of tax                 11,000      250,000
     wine cellar.                                calculated in (a)(1)(iii) and with
                                                 respect to bonded wine cellar
                                                 operations, the amount of tax on
                                                 wines and wine spirits possessed and
                                                 in transit.
    (iii) Distiller, processor and bonded wine  The sum of the amount of tax                 11,000      250,000
     cellar.                                     calculated in (a)(1)(iv) and with
                                                 respect to bonded wine cellar
                                                 operations, the amount of tax on
                                                 wines and wine spirits possessed and
                                                 in transit.
    (iv) Distiller, warehouseman, processor     The sum of the amount of tax                 16,000      300,000
     and bonded wine cellar.                     calculated in (a)(1)(vi) and with
                                                 respect to bonded wine cellar
                                                 operations, the amount of tax on
                                                 wines and wine spirits possessed and
                                                 in transit.
(b) Area operations bond:                       The penal sum shall be calculated in
                                                 accordance with the following table:
---------------------------------------------------------------------------------------
Total penal sums as determined under (a)        Requirements for penal sum of area
                                                 operations bond
---------------------------------------------------------------------------------------
Not over $300,000.............................  100 percent.
Over $300,000 but not over $600,000...........  $300,000 plus 70 percent of excess
                                                 over $300,000.
Over $600,000 but not over $1,000,000.........  $510,000 plus 50 percent of excess
                                                 over $600,000.
Over $1,000,000 but not over $2,000,000.......  $710,000 plus 35 percent of excess
                                                 over $1,000,000.
Over $2,000,000...............................  $1,060,000 plus 25 percent of excess
                                                 over $2,000,000.
---------------------------------------------------------------------------------------
(c) Withdrawal bond:
  (1) One plant qualified for distilled         The amount of tax which, at any one           1,000    1,000,000
   spirits operations.                           time, is chargeable against such bond
                                                 but has not been paid.
  (2) Two or more plants in a region qualified  Sum of the penal sums for each plant          (\1\)        (\2\)
   for distilled spirits operations.             calculated in (c)(1) of this section.
(d) Unit bond:
  (1) Both operations at a distilled spirits    Total penal sums of (a) and (c)(1) of         6,000    1,300,000
   plant (and any adjacent bonded wine cellar)   this section.
   and withdrawals from the bonded premises of
   the same distilled spirits plant.
  (2) Both operations at two or more distilled  Total penal sums of (b) and (c)(2) of         (\3\)        (\4\)
   spirits plants (and any adjacent bonded       this section in lieu of which given.
   wine cellar) within the same region and
   withdrawals from the bonded premises of the
   same distilled spirits plants.
----------------------------------------------------------------------------------------------------------------
\1\ Sum of the minimum penal sums required for each plant covered by the bond.
\2\ Sum of the maximum penal sums required for each plant covered by the bond. (The maximum penal sum for one
  plant is $1,000,000.)
\3\ Sum of the minimum penal sums for operations and withdrawal bonds required for each plant covered by the
  bond.
\4\ Sum of the maximum penal sums for area operations bonds and withdrawal bonds required for the plants covered
  by the unit bond.


(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]

Sec. 19.246  Strengthening bonds.

    In all cases when the penal sum of any bond becomes insufficient, 
the principal shall either give a strengthening bond with the same 
surety to attain a sufficient penal sum, or give a new bond to cover the 
entire liability. Strengthening bonds will not be approved where any 
notation is made thereon which is intended, or which may be construed, 
as a release of any former bond, or as limiting the amount of any bond 
to less than its full penal sum. Strengthening bonds shall show the 
current date of execution and the effective date.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended (26 U.S.C. 5551); 
sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

[[Page 326]]

                        New or Superseding Bonds

Sec. 19.247  General.

    New bonds shall be required in case of insolvency or removal of any 
surety, and may, at the discretion of the regional director 
(compliance), be required in any other contingency affecting the 
validity or impairing the efficiency of such bond. Executors, 
administrators, assignees, receivers, trustees, or other persons acting 
in a fiduciary capacity, continuing or liquidating the business of the 
principal, shall execute and file a new bond or obtain the consent of 
the surety or sureties on the existing bond or bonds. When, under the 
provisions of Sec. 19.250, the surety on any bond given under this 
subpart has filed an application to be relieved of liability under said 
bond and the principal desires or intends to continue the business of 
operations to which such bond relates, he shall file a valid superseding 
bond to be effective on or before the date specified in the surety's 
notice. New or superseding bonds shall show the current date of 
execution and the effective date.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended, 1394, as amended 
(26 U.S.C. 5175, 5176, 5551); sec. 805(c), Pub. L. 96-39, 93 Stat. 276 
(26 U.S.C. 5173))

Sec. 19.248  New or superseding bond.

    (a) Operations bond. When a new or superseding operations bond is 
not given as required in Sec. 19.247, the principal shall immediately 
discontinue the business or distilled spirits operations to which such 
bond relates.
    (b) Withdrawal bond. When a new or superseding withdrawal bond is 
not given as required by Sec. 19.247, the principal may not withdraw any 
distilled spirits from bonded premises (other than distilled spirits 
withdrawn under 26 U.S.C. 5214 or 7510) except on prior payment of tax.
    (c) Unit bond. When a new or superseding unit bond is not given as 
required by Sec. 19.247, the principal shall immediately discontinue the 
business or distilled spirits operations to which such bond relates and 
may not withdraw any distilled spirits from bonded premises (other than 
distilled spirits withdrawn under 26 U.S.C. 5214 or 7510) except on 
prior payment of tax.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5175, 
5176); sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

                          Termination of Bonds

Sec. 19.249  Termination of bonds.

    Operations, withdrawal, or unit bonds may be terminated as to 
liability for future withdrawals and/or to future production or 
deposits.
    (a) Pursuant to application of the surety as provided in 
Sec. 19.250.
    (b) On approval of a superseding bond.
    (c) On notification by the principal that he has discontinued 
withdrawals under the bond if such bond was filed solely as a withdrawal 
bond, or
    (d) On notification by the principal that he has discontinued 
business.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5175, 
5176); sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

Sec. 19.250  Application of surety for relief from bond.

    A surety on any operations, withdrawal, or unit bond may at any time 
in writing notify the principal and the regional director (compliance) 
in whose office the bond is on file that he desires, after a date named, 
to be relieved of liability under said bond. Such date shall be not less 
than 10 days after the date the notice is received by the regional 
director (compliance) in the case of a withdrawal bond, and not less 
than 90 days after the date the notice is received in the case of an 
operations or unit bond. The surety shall also file with the regional 
director (compliance) an acknowledgment or other proof of service on the 
principal. If such notice is not thereafter in writing withdrawn, the 
rights of the principal as supported by said bond shall be terminated on 
the date named in the notice, and the surety shall be relieved from 
liability to the extent set forth in Sec. 19.251.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5175, 
5176); sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

Sec. 19.251  Relief of surety from bond.

    (a) General. The surety on an operations, withdrawal, or unit bond 
who has filed application for relief from liability as provided in 
Sec. 19.250 shall be

[[Page 327]]

relieved from liability under such bond as set forth in this section.
    (b) Operations or unit bonds. Where a new or superseding bond is 
filed, the surety shall be relieved of future liability with respect to 
production and deposits wholly subsequent to the effective date of the 
new or superseding bond. Notwithstanding such relief, the surety shall 
remain liable for the tax on all distilled spirits or wines produced, or 
for other liabilities incurred, during the term of the bond. Where a new 
or superseding bond is not filed the surety shall, in addition to the 
continuing liabilities above specified, remain liable under the bond for 
all spirits or wines on hand or in transit to the bonded premises or 
bonded wine cellar, as the case may be, on the date named in the notice 
until all such spirits or wines have been lawfully disposed of, or a new 
bond has been filed by the principal covering the same.
    (c) Withdrawal or unit bonds. The surety shall be relieved from 
liability for withdrawals made wholly subsequent to the date specified 
in the notice, or the effective date of a new bond, if one is given.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5176,); 
sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

Sec. 19.252  Release of pledged securities.

    Securities of the United States pledged and deposited as provided in 
Sec. 19.234 shall be released only in accordance with the provisions of 
31 CFR part 225. Such securities will not be released by the regional 
director (compliance) until liability under the bond for which they were 
pledged has been terminated. When the regional director (compliance) is 
satisfied that they may be released, he shall fix the date or dates on 
which a part or all of such securities may be released. At any time 
prior to the release of such securities, the regional director 
(compliance) may extend the date of release for such additional length 
of time as he deems necessary.

(Ch. 290, Pub. L. 80-280, 61 Stat. 650 (31 U.S.C. 9301, 9303))

             Subpart I--Construction, Equipment and Security

Sec. 19.271  Construction of buildings

    Buildings in which spirits, denatured spirits, articles, or wines 
are produced, stored, or processed shall be constructed with substantial 
material (e.g., masonry, concrete, wood, metal, etc.), and arranged, 
equipped, and protected to provide adequate security to the revenue.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended) (26 U.S.C. 5178))

Sec. 19.272  Equipment.

    The proprietor shall provide equipment suitable for the operations 
conducted on the distilled spirits plant. The equipment shall also meet 
the needs for revenue protection.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended) (26 U.S.C. 5178))

Sec. 19.273  Tanks.

    (a) General. (1) Tanks used as receptacles for spirits, denatured 
spirits, or wines shall be located, constructed, and equipped to be 
suitable for the intended purpose and to allow ready examination.
    (2) An accurate means of measuring the contents of each tank shall 
be provided by the proprietor.
    (3) When a means of mearuring is not a permanent fixture of the 
tank, the tank shall be equipped with a fixed device to allow the 
approximate contents to be determined readily.
    (4) Tanks used for determining the tax imposed by 26 U.S.C. 5001 
shall be mounted on scales and an additional suitable device shall be 
provided so that the volume of the contents can be quickly and 
accurately determined.
    (5) The proprietor shall install walkways, landings and stairways 
which will permit safe access to all parts of a tank.
    (6) Tanks in which gauges required by this part are to be made shall 
not be used until they are accurately calibrated and a statement of 
certification of accurate calibration is included in the notice of 
registration.
    (7) If tanks or their fixed gauging devices are moved in location or 
position subsequent to original calibration, the

[[Page 328]]

tanks shall not be used until recalibrated.
    (8) All tanks shall be equipped or situated so that they may be 
locked or otherwise secured.
    (9) Any tank vents, flame arresters, foam devices, or other safety 
devices shall be constructed to prevent extraction of spirits or wines.
    (b) Scale tanks. (1) Beams or dials of scale tanks used for 
determining the tax imposed by 26 U.S.C. 5001 shall have minimum 
graduations not greater than the following:

------------------------------------------------------------------------
          Quantity to be weighed                 Minimum graduation
------------------------------------------------------------------------
Not exceeding 2,000 pounds...............  \1/2\ pound;
Between 2,000 and 6,000 pounds...........  1 pound;
Between 6,000 and 20,000 pounds..........  2 pounds;
Between 20,000 and 50,000 pounds.........  5 pounds;
Over 50,000 pounds.......................  10 pounds.
------------------------------------------------------------------------

    (2) For scales having a capacity greater than 2,000 pounds, the 
minimum quantity which may be entered onto the weighing tank scale for 
gauging for tax determination shall be the greater of
    (i) 1,000 times the minimum graduation of the scale or
    (ii) 5 percent of the total capacity of the weighing tank scale.
    (3) The weighing of lesser quantities for determination of tax may 
be authorized by the regional director (compliance) where the beam of 
the scale is calibrated in \1/2\ pound or 1 pound graduations and it is 
found by actual test that the scales break accurately at each 
graduation.
    (4) Lots of spirits weighing 1,000 pounds or less shall be weighed 
on scales having \1/2\ pound graduations.
    (c) Testing of scale tanks. (1) Proprietors shall ensure the 
accuracy of scales used for weighing lots of spirits or denatured 
spirits through tests conducted at intervals of not more than 6 months, 
and whenever scales are adjusted or repaired.
    (2) Proprietors shall also test, at least once a month, the 
gallonage represented to be in a scale tank against the gallonage 
indicated by volumetric determination of the contents of the tank. 
However, if the scale is not used during a month the volumetric 
determination need only be verified at the next time actually used.
    (3) The volumetric determination shall be made in accordance with 27 
CFR part 30, and if the variation exceeds 0.5 percent of the quantities 
shown to be in the tank, the proprietor shall take appropriate steps to 
have the accuracy of the scale verified.
    (4) When an ATF officer determines that a tank scale may be 
inaccurate, the proprietor shall have the accuracy of the scale tested.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended, 1358, as amended, 
1391, as amended (26 U.S.C. 5006, 5204, 5505))

Sec. 19.274  Pipelines.

    (a) General. (1) Pipelines for the conveyance of spirits, denatured 
spirits, articles, or wines shall be of permanent character and 
constructed, connected, arranged, and secured so as to afford adequate 
protection to the revenue and to permit ready examination. However, the 
regional director (compliance) may approve pipelines which may not be 
readily examined if no jeopardy to the revenue is created.
    (2) Where a pipeline connection must be flexible, a hose may be used 
if connected and secured so as to protect the revenue.
    (b) Identification. The regional director (compliance) may require 
permanent pipelines for conveyance of spirits or denatured spirits to be 
color coded to provide identification.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))

Sec. 19.275  Continuous distilling system.

    The distilling system shall be continuous, and designed, 
constructed, and connected in such a manner as to prevent the 
unauthorized removal of distilled spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))

Sec. 19.276  Package scales.

    Proprietors shall ensure the accuracy of scales used for weighing 
packages of spirits through tests conducted at intervals of not more 
than 6 months or whenever scales are adjusted or repaired. However, if 
the scales are not used during such period, the scales need only be 
tested prior to use. Scales used to weigh packages designed to

[[Page 329]]

hold 10 wine gallons or less shall indicate weight in ounces or in 
hundredths of a pound.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))

Sec. 19.277  Measuring devices and proofing instruments.

    (a) General. Proprietors shall provide for their own use accurate 
hydrometers, thermometers, and other necessary equipment to determine 
proof or volume.
    (b) Instruments. Hydrometers and thermometers used by proprietors to 
gauge spirits shall show subdivisions or graduations of proof and 
temperature which are at least as delimitated as those prescribed in 27 
CFR part 30. Proprietors shall make frequent tests of their hydrometers 
and thermometers, and, if they appear to be in error in excess of one 
subdivision, the instruments shall not be used until they are further 
tested and certified as accurate by the manufacturer or another 
qualified person.
    (c) Meters. The regional director (compliance) may approve 
applications to measure spirits by meter for purposes other than tax 
determination. Applications shall include sufficient technical data, 
such as the make, model and accuracy tolerance, to enable the regional 
director (compliance) to evaluate the suitability of the meter for its 
intended use. Corrections for temperature of the spirits being measured 
shall be made in conjunction with the volumetric measurement of spirits 
by meter. If a meter does not have a temperature compensating feature, 
temperature correction shall be ascertained and made from a 
representative sample taken from the spirits being measured.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))

Sec. 19.278  Identification of structures, areas, apparatus, and 
          equipment.

    (a) Each room or enclosed area where spirits, denatured spirits, 
articles, wine, distilling or fermenting materials, or containers are 
held, and each building, within the plant, shall be appropriately marked 
with a distinguishing number or letter.
    (b) Each tank or receptacle for spirits, denatured spirits, or wine 
shall be marked to show a unique serial number and capacity.
    (c) Each still, fermenter, cooker, and yeast tank shall be numbered 
and marked to show its use.
    (d) All other major equipment used for processing or containing 
spirits, denatured spirits, or wine, or distilling or fermenting 
material, and all other tanks, shall be identified as to use unless the 
intended purpose is readily apparent.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))

Sec. 19.279  Office facilities.

    (a) If the regional director (compliance) assigns on a continuing 
basis an ATF officer to a plant to supervise operations, the proprietor 
shall provide an office at the distilled spirits plant for the exclusive 
use of ATF officers in performing their duties. The office shall be 
provided with adequate office furniture, lighting, ventilation, heating, 
and toilet and lavatory facilities. A secure cabinet, fitted for locking 
with a Government lock and of adequate size, shall also be provided by 
the proprietor. The office, facilities, and equipment provided by the 
proprietor shall be subject to the approval of the regional director 
(compliance). Where suitable facilities are otherwise available, the 
regional director (compliance) may waive the requirements for a separate 
Government office.
    (b) If an ATF officer is not assigned to a plant on a continuing 
basis, the regional director (compliance) may require the proprietor to 
provide for Government use a cabinet as specified in paragraph (a) of 
this section.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))

Sec. 19.280  Signs.

    The proprietor shall place and keep conspicuously on the outside of 
his place of business a sign showing the name of the proprietor and 
denoting the business, or businesses, in which engaged.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1355, as amended (26 U.S.C. 5180))

[[Page 330]]

Sec. 19.281  Security.

    (a) General. The proprietor shall provide adequate security measures 
at the distilled spirits plant to protect the revenue.
    (b) Buildings. The buildings, rooms, and partitions shall be 
constructed of substantial materials. Doors, windows, or any other 
openings to the building shall be secured or fastened during times when 
distilled spirits plant operations are not being conducted.
    (c) Outdoor tanks. Outdoor tanks containing spirits, denatured 
spirits, or wine shall be individually locked or locked within an 
enclosure when they are not in use.
    (d) Indoor tanks. Indoor tanks containing spirits, denatured 
spirits, or wines or the rooms or buildings in which they are housed, 
shall be equipped so that they may be secured.
    (e) Approved locks. (1) Approved locks shall be used to secure:
    (i) Outdoor tanks containing spirits in the storage account or on an 
enclosure around such tanks;
    (ii) Indoor tanks containing spirits in the storage account or on 
the door from which access may be gained from the outside to the rooms 
or buildings in which such tanks are housed; and
    (iii) Any doors from which access may be gained from the outside to 
rooms or buildings containing spirits in portable bulk containers in the 
storage account.
    (2) Approved locks shall meet the following minimum specifications:
    (i) Corresponding serial number on the lock and on the key, except 
for master key locking systems;
    (ii) Case hardened shackle at least one-fourth inch in diameter, 
with heel and toe locking;
    (iii) Body width of at least 2";
    (iv) Captured key feature (key may not be removed while shackle is 
unlocked);
    (v) Tumbler with at least 5 pins; and
    (vi) Lock or key contains no bitting data.

Master key locking systems may be used at the option of the proprietor. 
Locks meeting the specifications in this section are approved locks for 
the purpose of 26 U.S.C. 5682. Proprietors who wish to use locks of 
unusual design, which do not meet the specifications in this part, shall 
submit an example or prototype of the lock to the Director, through the 
regional director (compliance), with a request that the lock be approved 
for use. The Director may require submission of the lock for testing 
prior to approval.
    (f) Additional security. Where the regional director (compliance) 
finds the construction, arrangement, equipment, or protection 
inadequate, additional security shall be provided (i.e., fences, flood 
lights, alarm systems, guard services) or changes in construction, 
arrangement, or equipment shall be made to be extent necessary to 
protect the revenue.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended, 1410, as amended 
(26 U.S.C. 5178, 5682); sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 
5202))

Sec. 19.282  Breaking Government locks.

    Where affixed, Government locks shall not be removed without the 
authorization of the area supervisor or an ATF officer, except where a 
person or property is in imminent danger from a disaster or other 
emergency. When a disaster or other emergency occurs, and it is 
impractical to first obtain authorization from an ATF officer, 
Government locks may be removed, by the proprietor, or by police or 
firefighters. When such action is taken, the proprietor shall see that 
security measures are taken to prevent illegal removal of spirits and, 
as soon as practical, shall notify the area supervisor of the action 
taken and submit within 5 days a written report, executed under the 
penalties of perjury, describing the emergency and the action.

(Sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5202))

                          Subpart J--Production

Sec. 19.311  Notice by proprietor.

    (a) Commencement of operations. The proprietor shall, before 
commencing production operations or resuming production operations after 
having given notice of suspension, file a notice on Form 5110.34 with 
the area supervisor, specifying the date on which he desires to commence 
or resume operations for the production of spirits. The notice

[[Page 331]]

shall be filed in accordance with the instructions on the form. The 
proprietor shall not commence or resume operations prior to the time 
specified in the notice.
    (b) Suspension of operations. Any proprietor desiring to suspend 
production operations for a period of 90 days or more shall file notice 
on Form 5110.34 with the area supervisor specifying the date on which he 
will suspend operations. The notice shall be filed in accordance with 
instructions on the form. In case of an accident which makes it apparent 
that operations cannot be conducted for 90 days or more, the proprietor 
shall give immediate notice of suspension on Form 5110.34.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1364, as amended (26 U.S.C. 5221))

Sec. 19.312  Receipt of materials.

    The quantities of fermenting and distilling materials (including 
nonpotable chemical mixtures containing spirits produced in accordance 
with Sec. 19.67), and of spirits, denatured spirits, articles, and 
spirits residues, for redistillation, received on bonded premises shall 
be determined by the proprietor, and reported as provided in subpart W 
of this part. Fermented material (except apple cider exempt from tax 
under 26 U.S.C. 5042(a)(1)) to be used in the production of spirits 
shall be produced on the bonded premises where used or must be received 
on the premises from (a) a bonded wine cellar, in the case of wine, or 
(b) a contiguous brewery where produced, in the case of beer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1365, as amended 
(26 U.S.C. 5201, 5222, 5223))

Sec. 19.313  Use of materials in production of spirits.

    The proprietor may produce spirits from any suitable material in 
accordance with statements of production procedure in his notice of 
registration. The distillation of nonpotable chemical mixtures received 
pursuant to application as provided in Sec. 19.67 shall be deemed to be 
the original and continuous distillation of the spirits in such mixtures 
and to constitute the production of spirits. Materials from which 
alcohol will not be produced may be used in production only if the use 
of the materials is described in approved statements of production 
procedure.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended 
(26 U.S.C. 5172, 5178))

Sec. 19.314  Removal of fermenting material.

    Material received for use as fermenting material may be removed from 
or used on bonded premises for other purposes. A record of use or 
removal shall be kept as provided in subpart W of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.315  Removal or destruction of distilling material.

    Except as provided in this section, distilling material shall not be 
removed from bonded premises before being distilled. The proprietor may 
remove mash, wort, wash or other distilling material--(a) to plant 
premises, other than bonded premises for use in such businesses as may 
be authorized under Sec. 19.72; (b) to other premises for use in 
processes not involving the production of (1) spirits, (2) alcoholic 
beverages, or (3) vinegar by the vaporizing process; or (c) for 
destruction. The residue of distilling material not introduced into the 
production system may be removed from the premises if the liquid is 
expressed from the material before removal and such liquid is not 
received at any distilled spirits plant or bonded wine cellar. Residue 
of beer used as distilling material may be returned to the producing 
brewery. Distilling material produced and wine and beer received for use 
as distilling material may be destroyed. A record of removal or 
destruction shall be kept as provided in subpart W of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended, 1381, as amended 
(26 U.S.C. 5222, 5370))

Sec. 19.316  Distillation.

    The distillation of spirits shall be such that the spirits pass 
through a continuous system from the first still or other production 
equipment where access to the system would constitute a jeopardy to the 
revenue until the production of the spirits is completed. The

[[Page 332]]

distiller may, in the course of production, convey the product through 
as many distilling or other production operations as desired, provided 
the operations are continuous. Distilling operations are continuous when 
the spirits are conveyed through the various steps of production as 
expeditiously as plant operation will permit. The collection of 
unfinished spirits for the purpose of redistillation is not deemed to be 
a break in the continuity of the distilling procedure. However, the 
quantity and proof of any unfinished spirits produced from distilling 
materials, the quantity of which was ascertained in the manner 
authorized in Sec. 19.732(c) for such materials, shall be determined and 
recorded before any mingling with other materials or before any further 
operations involving the unfinished spirits outside the continuous 
system. Spirits may be held, prior to the production gauge, only for so 
long as is reasonably necessary to complete the production procedure.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended, 1362, as amended, 
1365, as amended (26 U.S.C. 5178, 5211, 5222))

Sec. 19.317  Treatment during production.

    Spirits may, in the course of original and continuous distillation, 
be purified or refined through, or by use of, any material which will 
not remain incorporated in the finished product. Juniper berries and 
other natural aromatics, or the extracted oils of such, may be used in 
the distillation of gin. Spirits may be percolated through or treated 
with oak chips which have not been treated with any chemical. Materials 
used in treatment of spirits, and which do not remain in the spirits, 
shall be destroyed or so treated as to preclude the extraction of 
potable spirits therefrom.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.318  Addition of caramel to rum or brandy and addition of oak 
          chips to spirits.

    Caramel possessing no material sweetening properties may be added to 
rum or brandy on bonded premises prior to production gauge. Oak chips 
which have not been treated with any chemical may be added to packages 
prior to or after production gauge; however, notation to that effect 
shall be made on the record of production gauge as provided in 
Sec. 19.319.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.319  Production gauge.

    (a) General. All spirits shall be gauged by determining quantity and 
proof within a reasonable time after production is completed. Except as 
otherwise specifically provided in this section, quantities may be 
determined by volume or by weight, by approved meter, or, when approved 
by the Director, by other devices or methods which accurately determine 
the quantities. If caramel is added to brandy or rum, the proof of the 
spirits shall be determined after the addition. Spirits in each 
receiving tank shall be gauged before reduction in proof and both before 
and after each removal of spirits therefrom. The gauges shall be 
recorded by the proprietor in the records required by Sec. 19.736.
    (b) Tax to be determined on production gauge. Tax may be determined 
on the basis of the production gauge if:
    (1) Spirits are weighed into bulk conveyances;
    (2) Spirits are uniformly filled by weight into metal packages; or
    (3) Spirits are filled by weight into packages for immediate 
withdrawal from bonded premises and the details of the gauge for each 
package are recorded on a package gauge record according to Sec. 19.769.

Transaction records shall be marked ``Withdrawal on Production Gauge.''
    (c) Tax not to be determined on production gauge. If spirits are 
drawn from the production system into barrels, drums, or similar 
portable containers of the same rated capacity and the containers are 
filled to capacity, and the tax is not to be determined on the basis of 
the production gauge, the gauge may be made by:
    (1) Weighing in a tank, converting the weight into proof gallons, 
and determining the average content of each container; or
    (2) Measuring volumetrically, in a calibrated tank, converting the 
wine gallons determined into proof gallons,

[[Page 333]]

and determining therefrom the average content of each container; or
    (3) Converting the rated capacity into proof gallons to determine 
the average content of each container; or
    (4) Determining by a device or method approved under the provisions 
of paragraph (a) of this section, the total quantity filled into 
containers, and determining therefrom the average content of each 
container. Rated capacity of new cooperage shall be as prescribed by 
specifications of the manufacturer, or in the case of used cooperage, as 
determined by the proprietor.
    (d) Records of production gauge. In computing the production gauge 
on the basis of average content of packages as provided in paragraph (c) 
of this section, fractional proof gallons shall be rounded to the 
nearest one-tenth and the average content so determined and the number 
of packages filled shall be used in computing the quantity produced. A 
separate gauge record, as prescribed in Sec. 19.768, shall be prepared 
for each lot of packages filled (see Sec. 19.593(b)) and for each 
removal by pipeline or bulk conveyance for deposit in bond on the same 
plant premises. The gauge record shall indicate ``Deposit in storage'' 
or ``Deposit in processing.'' If spirits are to be transferred in bond, 
or withdrawn from bond, as authorized by this part, the production gauge 
shall be made on the form or record required by this part for the 
transaction (accompanied by a package gauge record, if required). Each 
transaction form or record and each package gauge record, if any, shall 
show:
    (1) The real name (or basic operating name as provided in 
Sec. 19.280) of the producer, and, if the spirits are produced under a 
trade name, the trade name under which produced.
    (2) For each remnant container, the actual proof gallons in the 
container.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended 
(26 U.S.C. 5204, 5211))

Sec. 19.320  Identification of spirits.

    At the time of production gauge, containers of spirits shall be 
identified by the proprietor in accordance with subpart R of this part. 
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 be entitled if drawn 
into wooden packages, followed by the word ``Designate,'' for example, 
``Bourbon Whisky Designate.''

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1360, as amended 
(26 U.S.C. 5201, 5206))

Sec. 19.321  Entry.

    Pursuant to the production gauge, the proprietor shall make 
appropriate entry for (a) deposit of the spirits on bonded premises for 
storage or processing, (b) withdrawal of the spirits on determination of 
tax, (c) withdrawal of the spirits free of tax, (d) withdrawal of the 
spirits without payment of tax, or (e) transfer of the spirits for 
redistillation. Entry for deposit on the bonded premises of the same 
plant premises shall be made on a gauge record, prepared according to 
Sec. 19.768. When spirits are entered for deposit on another plant 
premises or are entered for withdrawal or redistillation, the applicable 
provisions of subpart K or subpart P of this part shall be followed.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5211))

Sec. 19.322  Distillates containing extraneous substances.

    (a) Use in production. Distillates containing substantial quantities 
of fusel oil, aldehydes, or other extraneous substances may be removed 
from the distilling system prior to the production gauge for addition to 
fermenting or distilling material at the distillery where produced. 
Distillates removed from the distilling system under the provisions of 
this paragraph shall be added promptly to the fermenting or distilling 
material.
    (b) Use at bonded wine cellar. Distillates containing aldehydes may 
be removed, without payment of tax, to an adjacent bonded wine cellar 
for use therein for fermentation of wine to be used as distilling 
material at the distilled spirits plant from which the distillates were 
removed. The gauge and removal of distillates to an adajcent bonded wine 
cellar shall be in accordance with applicable provisions of subpart P of 
this part relating to withdrawal of wine spirits for use in wine

[[Page 334]]

production and the receipt and use of such distillates at an adjacent 
bonded wine cellar shall be in accordance with the provisions of 27 CFR 
part 240.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1365, as amended, 
1382, as amended (26 U.S.C. 5201, 5222, 5373))

                                 Formula

Sec. 19.324  Statement of production procedure or Form 5110.38.

    (a) A statement of production procedure is required as provided in 
Sec. 19.170 for the production of spirits from original sources or 
substances.
    (b) As provided in 27 CFR 5.27, an approved formula on Form 5110.38 
is required for the redistillation of spirits in the production account.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1365, as amended, 
1395, as amended (26 U.S.C. 5201, 5222, 5223, 5555))

                          Chemical By-Products

Sec. 19.326  Spirits content of chemicals produced.

    All chemicals produced, including chemical by-products of the 
spirits production system, shall be substantially free of spirits before 
being removed from bonded premises. Except as authorized by the 
Director, the spirits content of such chemicals to be removed from 
bonded premises shall not exceed 10 percent by volume. Proprietors shall 
test chemicals for spirits content. Records of the tests will be 
maintained according to Sec. 19.736.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.327  Disposition of chemicals.

    Chemicals meeting the requirements in Sec. 19.326 may be removed 
from bonded premises by pipeline or in such containers as the proprietor 
may desire. The quantities of such chemicals removed from bonded 
premises shall be determined by the proprietor and records of removals 
maintained according to Sec. 19.736. Packages of such chemicals shall be 
appropriately marked by the proprietor to show the nature of the 
contents. Samples of such chemicals may be secured by ATF officers.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1365, as amended 
(26 U.S.C. 5201, 5222))

Sec. 19.328  Wash water.

    Water used in washing chemicals to remove spirits therefrom may be 
run into a wash tank or a distilling material tank, or otherwise 
properly destroyed or disposed of on the premises.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1356, as amended 
(26 U.S.C. 5008, 5201))

                               Inventories

Sec. 19.329  Production inventories.

    Each distiller shall take a physical inventory of the spirits and 
denatured spirits in tanks and other vessels in the production account 
at the close of each calendar quarter and at such other times as the 
regional director (compliance) may require. The inventory shall show 
separately spirits and denatured spirits received for redistillation.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

                        Subpart K--Redistillation

Sec. 19.331  General.

    Distillers or processors may redistill spirits, denatured spirits, 
articles, and spirits residues. Certain products may only be redistilled 
pursuant to an approved formula on Form 5110.38, as specified in 27 CFR 
5.27.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended (26 U.S.C. 5223))

Sec. 19.332  Receipts for redistillation.

    Proprietors may receive and redistill spirits or denatured spirits 
which (a) have not been removed from bond; (b) have been withdrawn from 
bond on payment or determination of tax, and are eligible for return to 
bond as provided in subpart U of this part; (c) have been withdrawn from 
bond free of tax or without payment of tax, and are eligible for return 
to bond as provided in subpart U; or (d) have been abandoned to the 
United States and sold to the proprietor without the payment of tax. 
Proprietors may also receive and redistill recovered denatured spirits 
and recovered articles returned under the

[[Page 335]]

provisions of Sec. 19.683, and articles and spirits residues received 
under the provisions of Sec. 19.684.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1365, as amended 
1370, as amended (26 U.S.C. 5201, 5223, 5243); sec. 807, Pub. L. 96-93 
Stat. 285 (26 U.S.C. 5215))

Sec. 19.333  Redistillation.

    Spirits shall not be redistilled at a proof lower than that 
prescribed for the class and type at which such spirits were originally 
produced, unless the redistilled spirits are to be used in wine 
production, to be used in the manufacture of gin or vodka, or to be 
designated as alcohol. Different kinds of spirits must be redistilled 
separately, or with distilling material of the same kind or type as that 
from which the spirits were originally produced. However, such 
restriction shall not apply when (a) brandy is redistilled into 
``spirits-fruit'' or ``neutral spirits-fruit'' (not for use in wine 
production), (b) whiskey is distilled into ``spirits-grain'' or 
``neutral spirits-grain'', (c) spirits originally distilled from 
different kinds of material are redistilled into ``spirits-mixed'' or 
``neutral spirits-mixed'', or (d) the spirits are redistilled into 
alcohol. All spirits redistilled subsequent to production gauge shall be 
treated the same as if such spirits had been originally produced by the 
redistiller and all provisions of this part and 26 U.S.C. Chapter 51 
(including liability for tax attaching to spirits at the time of 
production) applicable to the original production of spirits shall be 
applicable thereto, except that spirits recovered by redistillation of 
denatured spirits, articles, or spirits residues may not be withdrawn 
from bonded premises except for industrial use or after denaturation 
thereof. Nothing in this section shall be construed as affecting any 
provision of this chapter or of 27 CFR part 5 relating to the labeling 
of distilled spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended (26 U.S.C. 5223); 
sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]

                           Subpart L--Storage

Sec. 19.341  General.

    Proprietors who are qualified as warehousemen as provided in this 
part, and who have otherwise complied with the requirements of this part 
for the storage of bulk distilled spirits and wines, shall conduct such 
operations pursuant to the provisions of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.342  Receipt and storage of bulk spirits and wines.

    (a) Deposit. All spirits entered for deposit in the storage account 
after production as provided in subpart J shall be deposited on the 
bonded premises designated in the entry for deposit. Spirits withdrawn 
from customs custody without payment of tax under the provisions of this 
part shall be received on the bonded premises to which so withdrawn and 
(unless to be immediately redistilled) shall be deposited on such 
premises. Spirits transferred in bond as provided in subpart P shall be 
deposited on the bonded premises designated on the transfer record.
    (b) Tanks. If spirits or wines are being deposited in a partially 
filled tank in storage on bonded premises, simultaneous withdrawals may 
not be made therefrom unless the flow of spirits or wines into and out 
of the tank isbeing measured by meters or other devices approved by the 
regional director (compliance) which permit a determination of the 
quantity being deposited and the quantity being removed. Proprietors 
shall maintain records of spirits or wines in tanks in accordance with 
subpart W of this part.
    (c) Storage. Spirits or wines may be held in the storage account in 
tanks or portable bulk containers on the bonded premises. When used for 
such storage, containers shall be kept so that they can be readily 
inspected or inventoried by ATF officers.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1362, as amended, 
1366, as amended, 1398, as amended (26 U.S.C. 5201, 5211, 5212, 5232, 
5601); sec. 806(a), Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5202); sec. 
807(a), Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5231))

[[Page 336]]

Sec. 19.343  Addition of oak chips to spirits and addition of caramel to 
          brandy and rum.

    Oak chips which have not been treated with any chemical may be added 
to packages either prior to or after filling. When oak chips are added 
to packages, notation of such fact shall be made on all transaction 
records. Caramel possessing no material sweetening properties may be 
added to rum or brandy in packages or tanks.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

                      Filling and Changing Packages

Sec. 19.344  Filling of packages from tanks.

    Spirits or wines may be drawn into packages from storage tanks on 
bonded premises. The spirits or wines in the tank shall be gauged prior 
to filling of packages, and when only a portion of the contents of the 
tank is packaged, the spirits or wines remaining in the tank shall be 
again gauged and such gauges shall be recorded by the proprietor in 
records required by Secs. 19.740 and 19.768. The provisions of 
Sec. 19.319 regarding the filling of packages and the taking of 
production gauges of packages shall be applicable to the filling and 
gauging of packages of spirits under this section.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.345  Change of packages.

    Spirits or wines in storage may be transferred from one package to 
another. Except in the case of spirits of 190 degrees or more proof, 
each new package shall contain spirits from only one package. Packages 
shall be marked as provided in subpart R of this part. In the case of 
wines, each package shall bear the same marks as the package from which 
the wine was transferred.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

                     Mingling or Blending of Spirits

Sec. 19.346  Mingling or blending of spirits for further storage.

    The following mingling or blending operations are permissible in the 
storage account of a warehouseman:
    (a) Mingling of spirits distilled at 190 degrees or more of proof. 
Spirits distilled at 190 degrees or more of proof, whether or not 
subsequently reduced, may be mingled in storage.
    (b) Mingling of spirits distilled at less than 190 degrees of proof. 
Spirits distilled at less than 190 degrees of proof may be mingled for 
withdrawal or further storage if--
    (1) In the case of domestic spirits:
    (i) Such spirits are of the same kind; and
    (ii) Such spirits were produced in the same State.
    (2) In the case of imported spirits:
    (i) Such spirits are of the same kind;
    (ii) Such spirits were produced in the same foreign country; and
    (iii) Such spirits were treated, blended, or compounded in the same 
foreign country and the duty was paid at the same rate.
    (3) In the case of imported spirits which are recognized as 
distinctive products in 27 CFR part 5:
    (i) Such spirits are of the same kind;
    (ii) Such spirits were produced by the same proprietor in the same 
foreign country; and
    (iii) Such spirits were treated, blended, or compounded by the same 
proprietor in the same foreign country and the duty was paid at the same 
rate.
    (c) Permissible blending of beverage rums or brandies. Fruit 
brandies distilled from the same kind of fruit at not more than 170 
degrees of proof may, for the sole purpose of perfecting such brandies 
according to commercial standards, be blended with each other, or with 
any blend of such fruit brandies in storage. Rums may, for the sole 
purpose of perfecting them according to commercial standards, be blended 
with each other, or with any blend of rums.
    (d) Packaging of mingled spirits or blended rums and brandies. 
Packaging

[[Page 337]]

after mingling or blending shall be conducted under the provisions of 
Sec. 19.344. If so desired, the mingled or blended spirits may be 
returned to the packages from which they were dumped for mingling or 
blending, or as many of such packages as are necessary.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1362, as amended 
(26 U.S.C. 5201, 5214))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-259, 52 
FR 41423, Oct. 28, 1987]

Sec. 19.347  Packages dumped for mingling.

    When dumping packages of spirits of less than 190 degrees of proof 
for mingling in the storage account, the proprietor shall record such 
mingling on the tank record prescribed in Sec. 19.742 covering such 
tank. When packages of spirits of 190 degrees or more of proof are to be 
mingled, the proprietor shall record such mingling in the tank summary 
record prescribed in Sec. 19.743 for all tanks of spirits of 190 degrees 
or more of proof. Each package of spirits to be mingled under this 
subpart shall be examined by the proprietor, and if any package bears 
evidence of loss due to theft or unauthorized voluntary destruction, 
such package shall not be dumped until the area supervisor has been 
notified.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.348  Determining age of mingled spirits.

    When spirits are mingled, the age of the spirits for the entire lot 
shall be the age of the youngest spirits contained in the lot.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.349  Mingled spirits or wines held in tanks.

    When spirits of less than 190 degrees of proof or wines are mingled 
in a tank, the proprietor shall gauge the spirits or wines in the tank 
and record the mingling gauge on the tank record prescribed in 
Sec. 19.742.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

                               Inventories

Sec. 19.353  Storage inventories.

    Each warehouseman shall take a physical inventory of all spirits and 
wines held in the storage account in tanks and other vessels (except 
packages) at the close of each calendar quarter and at such other times 
as the regional director (compliance) may require. The inventory shall 
separately identify spirits and wines. The results of the inventory 
shall be recorded in accordance with subpart W of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Subpart M--Processing Operations Other Than Denaturation and Manufacture 
                               of Articles

Sec. 19.371  General.

    Proprietors, who are qualified as processors as provided in this 
part, shall conduct operations relating to the manufacture, treatment, 
mixing or bottling of distilled spirits on bonded premises pursuant to 
the provisions of this subpart. Proprietors, who conduct operations 
relating to the denaturation of spirits or the manufacture of articles 
on bonded premises, pursuant to the provisions of subpart N of this 
part, shall be qualified as processors.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

   Receipt and Use of Spirits, Wines and Alcoholic Flavoring Materials

Sec. 19.372  Receipt of spirits, wines and alcoholic flavoring materials 
          for processing.

    (a) Proprietors may receive into the processing account--
    (1) Bulk spirits (i) from the production or storage account at the 
same plant, (ii) by transfer in bond from another distilled spirits 
plant, or (iii) on withdrawal from customs custody under 26 U.S.C. 5232;
    (2) Wines (i) from the storage account at the same plant, or (ii) by 
transfer in bond from a bonded wine cellar or another distilled spirits 
plant;
    (3) Spirits returned to bond under the provisions of 26 U.S.C. 5215; 
or
    (4) Alcoholic flavoring materials.

[[Page 338]]

    (b) Spirits and wines received in bulk containers or conveyances 
shall be recorded as dumped on receipt, but may be retained in the 
containers or conveyances in which received until used. Spirits and 
wines received by pipeline shall be deposited in tanks, gauged by the 
proprietor, and recorded as dumped. Alcoholic flavoring materials may be 
retained in the containers in which received or may be transferred to 
another container if the proprietor marks or otherwise indicates 
thereon, the full identification of the original container, the date of 
receipt, and the quantity deposited. Alcoholic flavoring materials and 
nonalcoholic ingredients shall be considered dumped when mixed with 
spirits or wines. The proof gallon content of spirits, wines, and 
alcoholic flavoring materials shall be determined at the time of 
dumping.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.373  Use of spirits, wines and alcoholic flavoring materials.

    A proprietor shall prepare a dump/batch record according to 
Sec. 19.748 for spirits, wines, alcoholic flavoring materials, and 
nonalcoholic ingredients used in the manufacture of a distilled spirits 
product as follows:
    (a) Dump record. When spirits, wines, or alcoholic flavoring 
materials are dumped for use in the manufacture of a distilled spirits 
product, and when spirits are dumped for redistillation in the 
processing account, the proprietor shall prepare a dump record.
    (b) Batch record. The proprietor shall prepare a batch record to 
report:
    (1) The dumping of spirits which are to be used immediately and in 
their entirety in preparing a batch of a product manufactured under an 
approved formula;
    (2) The use of spirits or wines previously dumped, reported on dump 
records and retained in tanks or receptacles; and
    (3) Any combination of ingredients in paragraphs (b) (1) and (2) of 
this section used in preparing a batch of a product manufactured under 
an approved formula.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.374  Manufacture of nonbeverage products, intermediate products, 
          or eligible flavors.

    Distilled spirits and wine may be used for the manufacture of 
flavors or flavoring extracts of a nonbeverage nature as intermediate 
products to be used exclusively in the manufacture of other distilled 
spirits products on bonded premises. Nonbeverage products on which 
drawback will be claimed, as provided in 26 U.S.C. 5131-5134, may not be 
manufactured on bonded premises. Premises used for the manufacture of 
nonbeverage products on which drawback will be claimed must be separated 
from bonded premises. For purposes of computing an effective tax rate, 
flavors manufactured on either the bonded or general premises of a 
distilled spirits plant are not eligible flavors.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-297, 55 FR 18063, Apr. 30, 1990]

                               Obscuration

Sec. 19.376  Determining obscuration.

    Proprietors may determine the proof obsecuration as prescribed in 27 
CFR Sec. 30.32 of spirits to be bottled on the basis of a representative 
sample taken: (a) from a storage tank incident to the transfer of the 
spirits to the processing account, or (b) from a tank after the spirits 
have been dumped for processing, whether or not combined with other 
alcoholic ingredients. The obscuration shall be determined after the 
sample has been reduced to within one degree of the proof at which the 
spirits will be bottled. Only water may be added to a lot of spirits to 
be bottled for which the determination of proof obscuration is made from 
a sample under this section. The proof obscuration for products gauged 
pursuant to this section shall be frequently verified by testing samples 
taken from bottling tanks prior to commencement of bottling.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))

[[Page 339]]

                                Formulas

Sec. 19.378  Formula requirements.

    An approved formula on ATF Form 5110.38 must be secured for spirits 
for domestic use or export as provided in 27 CFR 5.26--5.27 before 
processors may blend, mix, purify, refine, compound or treat spirits in 
any manner which results in a change of character, composition, class or 
type of the spirits including redistillation as provided in Sec. 19.331, 
and the production of gin or vodka by other than original and continuous 
distillation.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1395, as amended 
(26 U.S.C. 5201, 5555))

              Bottling, Packaging, and Removal of Products

Sec. 19.381  Removals from processing.

    Spirits shall not be transferred from processing to the storage 
account. Processors may remove--
    (a) Spirits upon tax determination or withdrawal under the 
provisions of 26 U.S.C. 5214 or 26 U.S.C. 7510;
    (b) Spirits to the production account at the same plant for 
redistillation;
    (c) Bulk spirits by transfer in bond to the production or the 
processing account at another distilled spirits plant for redistillation 
or further processing;
    (d) Spirits or wines for authorized voluntary destruction; or
    (e) Wines by transfer in bond to a bonded wine cellar or to another 
distilled spirits plant. However, wine may not be removed from the 
bonded premises of a distilled spirits plant for consumption or sale as 
wine. Spirits may be bottled and cased for removal. Spirits or wines may 
be removed in any approved bulk container, by pipeline or in bulk 
conveyances on compliance with the provisions of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1320, as amended, 
1323, as amended, 1356, as amended, 1360, as amended, 1362, as amended, 
1365, as amended, 1380, as amended (26 U.S.C. 5001, 5006, 5008, 5201, 
5206, 5212, 5214, 5223, 5362))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-230, 51 
FR 21748, June 16, 1986]

Sec. 19.382  Bottling tanks.

    All spirits shall be bottled from tanks listed and certified as 
accurately calibrated in the notice of registration. However, the 
regional director (compliance) may authorize bottling from original 
packages or special containers where it is impracticable to use a 
bottling tank. Bottlers desiring to bottle from packages or special 
containers shall file notice with the area supervisor. The notice shall 
show the necessity for the operations.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.383  Bottling tank gauge.

    When a distilled spirits product is to be bottled or packaged, the 
proprietor shall gauge the product, on completion of any filtering, 
reduction, or other treatment, and prior to commencement of bottling or 
packaging. Any gauge made under this section shall be made at labeling 
or package marking proof while the product is in the tank from which it 
is to be bottled or packaged, and the details of the gauge shall be 
entered on the bottling and packaging record prescribed in Sec. 19.749.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.384  Preparation of bottling or packaging record.

    The proprietor shall prepare a record for each batch of spirits 
bottled or packaged according to the specifications in Sec. 19.749.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.385  Labels to agree with contents of tanks and containers.

    Labels affixed to containers shall agree in every respect with the 
spirits in the tanks from which the containers were filled. If they do 
not the proprietor shall relabel such spirits with a proper label. The 
proprietor's records shall be such that they will enable ATF officers to 
readily determine, by case or package serial number, which label was 
used on any given filled container.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[[Page 340]]

Sec. 19.386  Alcohol content and fill.

    (a) General. (1) At representative intervals during bottling 
operations, proprietors shall test and examine bottled spirits to 
determine whether those spirits agree in alcohol content and quantity 
(fill) with that stated on the label or bottle.
    (2) If the regional director (compliance) finds that a proprietor's 
test procedures do not protect the revenue and ensure label accuracy of 
the bottled product, the regional director may require corrective 
measures.
    (b) Variations in alcohol content and fill. The proprietor shall 
rebottle, recondition, or relabel spirits if the bottle contents do not 
agree with the respective data on the label or bottle as to:
    (1) Quantity (fill), except for such variation as may occur in 
filling conducted in compliance with good commercial practice with an 
overall objective of maintaining 100 percent fill for spirits bottled; 
and/or
    (2) Alcohol content, subject to a normal drop in alcohol content 
which may occur during bottling operations not to exceed:
    (i) 0.25 percent alcohol by volume for products containing solids in 
excess of 600 mg per 100 ml, or
    (ii) 0.25 percent alcohol by volume for all spirits products bottled 
in 50 or 100 ml size bottles, or
    (iii) 0.15 percent alcohol by volume for all other spirits and 
bottle sizes.

For example, a product with a solids content of less than 600 mg per 100 
ml, labeled as containing 40 percent alcohol by volume and bottled in a 
750 ml bottle, would be acceptable if the test for alcohol content found 
that it contained 39.85 percent alcohol by volume.
    (c) Records. Proprietors shall record the results of all tests of 
alcohol content and quantity (fill) in the record required by 
Sec. 19.750.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1394, as amended 
(26 U.S.C. 5201, 5301)

[51 FR 36395, Oct. 10, 1986, as amended by T.D. ATF-288, 54 FR 47770, 
Nov. 17, 1989]

Sec. 19.387  Completion of bottling.

    When the contents of a bottling tank are not completely bottled at 
the close of the day, the bottler shall make entries on the bottling and 
packaging record covering the total quantity bottled that day from the 
tank. Entries shall be made not later than the morning of the following 
business day unless the bottler maintains auxiliary or supplemental 
records as provided in Sec. 19.731.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.388  Cases.

    (a) General. (1) On completion of bottling, the filled bottles with 
labels and properly affixed closures or other devices shall be placed in 
cases, and the cases shall be sealed.
    (2) Each case of spirits filled shall be marked as prescribed by 
subpart R of this part before removal from such premises.
    (b) Unsealed cases. (1) Cases may be temporarily retained on bonded 
premises without being sealed pending the affixing to bottles of any 
required labels, State stamps, or seals.
    (2) Unsealed cases containing bottles without labels shall be marked 
in accordance with subpart R of this part, and segregated from other 
cases on bonded premises pending affixing of the labels, State stamps, 
or seals.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1360, as amended 
(26 U.S.C. 5201, 5206))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23951, June 7, 1985]

Sec. 19.389  Remnants.

    Where incident to bottling there remain bottles less than the number 
necessary to fill a case, the bottles, after being affixed with closures 
or other devices and labeled, may be marked as a remnant case as 
provided in subpart R of this part or kept uncased on the bonded 
premises until spirits of the same kind are again bottled. Appropriate 
notation shall be made on the bottling and packaging record to cover the 
bottling and disposition of the remnant. If the remnant is subsequently 
used to complete the filling of a case, an accounting shall be made on 
the subsequent bottling and packaging record showing the use of the 
remnant

[[Page 341]]

by adding the remnant gallonage to the quantity to be accounted for 
together with appropriate notation explaining the transactions.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1360, as amended 
(26 U.S.C. 5201, 5206))

[T.D. ATF-206, 50 FR 23951, June 7, 1985]

Sec. 19.390  Filling packages.

    Spirits may be drawn into packages from a tank (conforming to the 
requirements of Sec. 19.273). Such packages shall be gauged by the 
proprietor, and he shall report the details of such gauge on a package 
gauge record, according to Sec. 19.769, and attach a copy of the package 
gauge record to each copy of the bottling and packaging record covering 
the product. Such packages shall be marked as prescribed by subpart R of 
this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.391  Removals by bulk conveyances or pipelines.

    When the spirits in the processing accounts are to be removed in 
bulk conveyances or by pipeline, the proprietor shall record the filling 
of the conveyance or the transfer by pipeline on the bottling and 
packaging record. The spirits shall be removed from bonded premises in 
accordance with subpart P of this part. The cosignor shall forward to 
the consignee a statement of composition or a copy of any formula under 
which such spirits were processed for determining the proper use of the 
spirits, or for the labeling of the finished product. Bulk conveyances 
shall be marked as provided in subpart R of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-206, 50 FR 23951, June 7, 1985]

Sec. 19.392  Rebottling.

    When the spirits are dumped for rebottling, the proprietor shall 
prepare a bottling and packaging record, appropriately modified. If the 
spirits were originally bottled by another proprietor, a statement from 
the original bottler consenting to the rebottling must be secured by the 
proprietor.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.393  Reclosing and relabeling.

    The proprietor may reclose or relabel distilled spirits, either 
before removal from bonded premises or after return thereto. The 
reclosing or relabeling of spirits returned to bonded premises shall be 
done immediately, and the spirits promptly removed. When spirits were 
originally bottled by another proprietor, the relabeling proprietor 
shall have on file a statement from the original bottler consenting to 
the relabeling. When spirits are relabeled, the proprietor shall have a 
certificate of label approval or certificate of exemption from label 
approval issued under 27 CFR part 5 for labels used on relabeled 
spirits. The proprietor shall prepare a separate record according to 
Sec. 19.747 to cover the relabeling or reclosing. For spirits returned 
to bond under 26 U.S.C. 5215(c), the proprietor shall annotate such 
information on the record.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1358, as amended 
(26 U.S.C. 5201, 5205); sec. 807, Pub. L. 96-39, 93 Stat. 280 (26 U.S.C. 
5215))

[T.D. ATF-206, 50 FR 23951, June 7, 1985]

Sec. 19.394  Bottled-in-bond spirits.

    Spirits which are labeled as bottled-in-bond for domestic 
consumption shall meet the requirements in 27 CFR part 5 and shall bear 
a closure or other device as required by subpart T of this part.

(Approved by the Office of Management and Budget under control number 
1512-0189)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-206, 50 FR 23951, June 7, 1985]

Sec. 19.395  Labels for export spirits.

    All bottles containing spirits bottled for export shall have 
securely affixed thereto a label showing the following:
    (a) Kind of spirits;
    (b) Percent-alcohol-by-volume of the spirits;
    (c) Net contents, unless the markings on the bottle indicate such 
contents; and

[[Page 342]]

    (d) The name (or, if desired, the trade name) of the bottler.

The bottler may place on the label any additional information that he 
may desire if it is not inconsistent with the required information. The 
label information may be stated in the language of the country to which 
the spirits are to be exported provided the proprietor maintains on file 
an English translation of the information. The net contents and proof 
may be stated in the units of measurement of the foreign country 
provided the proprietor maintains a record of the equivalent units as 
they would be required to be expressed if bottled for domestic 
consumption. The Director may waive the requirement of showing any of 
the information required by this section, other than the kind of 
spirits, upon a showing that the country to which the spirits are to be 
exported prohibits the showing of such information. With respect to kind 
of spirits, the Director may waive the designation required by 27 CFR 
5.22, only to the extent that the label need not bear the word 
``diluted'' on distilled spirits bottled below the minimum bottling 
proof, provided this is in accordance with the rules of the countries to 
which such product is to be exported.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1374, as amended 
(26 U.S.C. 5201, 5301))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-237, 51 
FR 36395, Oct. 10, 1986; T.D. ATF-283, 54 FR 11704, Mar. 22, 1989]

Sec. 19.396  Spirits removed for shipment to Puerto Rico.

    Spirits removed for shipment to Puerto Rico with benefit of drawback 
or without payment of tax under the provisions of 27 CFR part 252 are 
subject to the provisions of 27 CFR part 5 in respect to labeling 
requirements and standards of fill for bottles.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, (26 U.S.C. 5201))

Sec. 19.397  Spirits not originally intended for export.

    Spirits manufactured, produced, bottled in bottles, packed in 
containers, or which are packaged in casks or other bulk containers in 
the United States, originally intended for domestic use may be exported 
with benefit of drawback or without payment of tax if the cases or bulk 
containers are marked as required by 27 CFR part 252. The proprietor may 
relabel the spirits to show any of the information provided for in 
Sec. 19.395. When the proprietor desires to file a claim for drawback on 
spirits prepared for export under this section, the provisions of 27 CFR 
252.195b shall be followed. When the proprietor desires to withdraw 
spirits without payment of tax, he shall file a notice in accordance 
with 27 CFR 252.92.

(Approved by the Office of Management and Budget under control number 
1512-0189)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended, 1358, as amended, 
1362, as amended (26 U.S.C. 5062, 5205, 5214))

[T.D. ATF-206, 50 FR 23951, June 7, 1985]

Sec. 19.398  Alcohol.

    (a) Containers. Subject to the provisions of subpart R of this part, 
alcohol for industrial use may be put in bottles, packages, or other 
containers. Proprietors shall comply with the provisions in subpart S of 
this part when alcohol for nonindustrial domestic use is bottled.
    (b) Closures. Closures or other devices shall be affixed to 
containers of alcohol as provided in subpart T of this part.
    (c) Bottle labels. All bottles of alcohol for industrial use shall 
have affixed thereto a label showing ``Alcohol'' and the name and plant 
number of the bottler. The bottler may place on the label additional 
information, if it is not inconsistent with the required information.
    (d) Case marks. Each case of bottled alcohol shall bear the marks 
prescribed therefor in subpart R of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1369, as amended 
(26 U.S.C. 5201, 5206, 5235, 5301))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23952, June 7, 1985]

[[Page 343]]

                                 Records

Sec. 19.400  Daily summary record of spirits bottled or packaged.

    The proprietor shall maintain a separate daily summary record of 
spirits bottled or packaged as provided in Sec. 19.751.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

                               Inventories

Sec. 19.401  Inventories of wines and bulk spirits (except in packages) 
          in processing account.

    Each proprietor shall take a physical inventory of wines and bulk 
spirits (except in packages) in the processing account at the close of 
each calendar quarter, and at such other time as the regional director 
(compliance) may require. The results of the inventory shall be recorded 
in accordance with subpart W of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.402  Inventories of bottled and packaged spirits.

    (a) Physical inventories. (1) Physical inventories of bottled and 
packaged spirits in the processing account shall be taken for the return 
periods ending June 30 and December 31 of each year, and for other 
return periods as may be required by the regional director (compliance).
    (2) Physical inventories may be taken within a period of a few days 
before or after June 30 or December 31 (or other dates approved by the 
regional director (compliance), if:
    (i) Such period does not include more than one complete weekend; and
    (ii) Necessary adjustments are made to reflect pertinent 
transactions, so that the recorded inventories will agree with the 
actual quantities of bottled or packaged spirits on hand in processing 
at the prescribed times.
    (3) On approval of an application filed with the regional director 
(compliance), required physical inventories may be taken on dates other 
than June 30 and December 31 if the dates established for taking such 
inventories:
    (i) Coincide with the end of a return period, and
    (ii) Are approximately six months apart.
    (4) On approval of the application, the designated inventory dates 
shall take effect with the first inventory scheduled to be taken within 
six months of the previous June 30 or December 31 inventory.
    (b) Waiver of physical inventory. (1) The regional director 
(compliance), on receipt of an application, may relieve a proprietor of 
the requirement of taking the June 30 or December 31 physical inventory, 
(or other date approved under paragraph (a) of this section) if he finds 
that only one such inventory during any 24 consecutive return periods is 
necessary.
    (2) The regional director (compliance) may reimpose the requirement 
for the waived inventory if he finds that it is necessary for law 
enforcement or protection of the revenue.
    (c) Notification of physical inventory. Whenever a physical 
inventory of bottled or packaged spirits is to be taken, the proprietor 
shall, at least 5 business days in advance, notify the area supervisor 
of the date and time he will take such inventory.
    (d) Supervision of physical inventories. Physical inventories 
required under the provisions of this section shall be taken under such 
supervision, or verified in such manner, as the regional director 
(compliance) may require.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

      Subpart N--Denaturing Operations and Manufacture of Articles

Sec. 19.451  General.

    Authorized proprietors who are qualified as processors may conduct 
denaturing operations or manufacture articles pursuant to the provisions 
of this part. Proprietors shall not conduct denaturing operations or 
manufacture articles except as provided in this part. Records of 
denaturing operations and the manufacture of articles shall be 
maintained in accordance with Sec. 19.752 and Sec. 19.753.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178); 
sec. 807(a), Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5241))

[[Page 344]]

                              Denaturation

Sec. 19.452  Formulas.

    Spirits shall be denatured in accordance with formulas as authorized 
in 27 CFR part 21 or their alternatives. Denaturing materials shall be 
thoroughly mixed with the spirits being denatured.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242); 
sec. 807, Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5241))

Sec. 19.453  Testing of denaturants.

    (a) Testing. Proprietors shall ensure that the materials they 
receive for use in denaturing conform to the specifications prescribed 
in 27 CFR part 21. The regional director (compliance) may require the 
testing of denaturants at any time.
    (b) Samples. Samples of denaturants shall be taken in such manner as 
to represent a true composite of the total lot being sampled. When 
samples are tested by persons other than a proprietor, a copy of the 
analysis or a statement, signed by the chemist performing the test, 
shall be secured and filed by the proprietor for each test. Samples of 
denaturants may be taken by ATF officers at any time for testing by 
Government chemists.
    (c) Conformity. When a denaturant does not conform to the 
specifications prescribed under 27 CFR part 21, the proprietor shall not 
use the material unless he treats or manipulates the denaturant to make 
it conform to such specifications. Such treated or manipulated 
denaturant shall again be tested.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242))

Sec. 19.454  Gauge for denaturation.

    The proprietor shall gauge spirits before denaturation and after 
denaturation and record each gauge on the record of denaturation as 
prescribed in Sec. 19.752(b). However, spirits dumped from previously 
gauged containers or spirits transferred directly to mixing tanks from 
gauge tanks where they were gauged, need not again be gauged. 
Measurements of spirits and denaturants shall be made by volume, weight, 
by approved meter, or, when approved by the Director, other devices or 
methods.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204); 
sec. 807, Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5241))

Sec. 19.455  Dissolving of denaturants.

    Denaturants which are difficult to dissolve in spirits at usual 
working temperatures, which are highly volatile, or which become solid 
at such usual temperatures may be liquefied or dissolved in a small 
quantity of spirits or water in advance of their use in the production 
of specially denatured spirits, pursuant to the prescribed formula, so 
long as the proof of the denatured spirits manufactured does not fall 
below the proof prescribed for the applicable formula in 27 CFR part 21. 
Any spirits used in dissolving denaturants and contained in the 
resulting solution shall be included as part of the total quantity of 
spirits denatured in each batch.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242))

Sec. 19.456  Adding denaturants.

    Denaturants and spirits shall be mixed in packages, tanks, or bulk 
conveyances on bonded premises. The regional director (compliance) may, 
on written application, authorize other methods of mixing denaturants 
and spirits if he deems such denaturation will not hinder effective 
administration of this part or jeopardize the revenue. If requested by 
the regional director (compliance), the proprietor shall submit a flow 
diagram of the intended process or method of adding denaturants.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242))

Sec. 19.457  Neutralizing denatured spirits.

    Proprietors may add trace quantities of compounds such as caustics 
or acids to certain formulas of denatured spirits to neutralize such 
spirits, if the intended effect of the denaturants is not reduced. 
Proprietors who neutralize denatured spirits must record, for each 
formula the kinds and quantities of compounds used, and the formula 
number of the denatured spirits neutralized.


[[Page 345]]


(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242); 
sec. 807, Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5241))

Sec. 19.458  Restoration and redenaturation of recovered denatured 
          spirits and recovered articles.

    Recovered denatured spirits and recovered articles received on 
bonded premises, as provided in subpart U of this part, for restoration 
(including redistillation, if necessary) and/or redenaturation may not 
be withdrawn from bonded premises except for industrial use or after 
denaturation thereof. If the recovered or restored denatured spirits or 
recovered articles are to be redenatured and do not require the full 
amount of denaturants for redenaturation, a notation to that effect will 
be made on the record of denaturation required by Sec. 19.752(b).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242))

Sec. 19.459  Mixing of denatured spirits.

    (a) Denatured spirits produced under the same formula may be mixed 
on bonded premises.
    (b) Denatured spirits of different formulas may be mixed on bonded 
premises for immediate redistillation at the same plant or at another 
plant in accordance with the provisions of subpart K of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242); 
sec. 807, Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5241))

Sec. 19.460  Conversion of denatured alcohol formulas.

    (a) Conversion of Formula No. 1. Any specially denatured alcohol, 
except Formulas No. 3-A and No. 30, may be converted into specially 
denatured alcohol, Formula No. 1, by the addition of methyl alcohol and 
either denatonium benzoate, N.F. (BITREX), methyl isobutyl ketone, mixed 
isomers of nitropropane, or methyl n-butyl ketone in accordance with the 
formulation prescribed in Sec. 21.32 of this chapter. For specially 
denatured alcohol Formulas No. 3-A and No. 30, the methyl alcohol 
content shall be reduced to the level prescribed for specially denatured 
alcohol Formula No. 1 by the addition of ethyl alcohol before adding one 
of the other ingredients prescribed in Sec. 21.32 of this chapter.
    (b) Conversion to Formula No. 29. Any specially denatured alcohol 
may be converted to specially denatured alcohol, Formula No. 29, by the 
addition of acetaldehyde or ethyl acetate, in accordance with the 
formulations prescribed in 27 CFR 21.56.
    (c) General rule. In addition to the conversions provided in 
paragraphs (a) and (b) of this section, any specially denatured alcohol 
may be converted to another specially denatured alcohol formula, if the 
resultant alcohol-denaturant mixture contains only the alcohol and 
denaturant or denaturants in the proportions authorized in 27 CFR part 
21 for the formula to which converted. Specially denatured alcohol which 
is converted under this paragraph may only be used as authorized in 27 
CFR part 21 for the formula to which converted.
    (d) Conditions governing conversion and use. The quantities of 
denaturants required for conversions authorized in paragraphs (a), (b) 
and (c) of this section shall be determined on the basis of the alcohol 
in the formulations. Specially denatured alcohol converted to Formula 
No. 29 may be used as authorized in 27 CFR 21.56(b) except that it shall 
not be used in the manufacture of vinegar, drugs, or medicinal 
chemicals, and the conditions governing use provided in 27 CFR 21.56(c) 
shall apply.
    (e) Conversion to other formulations. Proprietors desiring to 
convert specially denatured alcohol other than as provided in paragraphs 
(a), (b), and (c) of this section shall obtain approval from the 
Director prior to such conversion.
    (f) Conversion to completely denatured alcohol. Any specially 
denatured alcohol not containing methanol or wood alcohol may be 
converted to any one of the completely denatured alcohol formulas, 
prescribed in 27 CFR part 21, by adding the required denaturants.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9160, Mar. 6, 1985]

[[Page 346]]

Sec. 19.461  Receipt and storage of denatured spirits.

    (a) Deposit. Denatured spirits produced, received in bond as 
provided in subpart P or returned to bonded premises as provided in 
subpart U of this part, shall be deposited on the bonded premises.
    (b) Tanks. Proprietors shall maintain a record in accordance with 
Sec. 19.752 for tanks in which denatured spirits are stored.
    (c) Storage. Denatured spirits may be stored on bonded premises in 
any container into which denatured spirits may be filled on bonded 
premises. Such containers shall be so stored that they can be readily 
inspected by ATF officers and inventoried. The provisions of Sec. 19.133 
are applicable to storage of denatured spirits in portable containers. 
However, upon application, the regional director (compliance) may 
authorize the proprietor to store packages and cases in any manner which 
safeguards the interests of the Government.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.462  Filling of containers from tanks.

    Denatured spirits may be drawn into portable containers from tanks 
on bonded premises. The denatured spirits in the tanks shall be gauged 
prior to filling of the containers, and when only a portion of the 
contents of the tank is drawn into containers, the denatured spirits 
remaining in the tank shall be again gauged and such gauges shall be 
recorded by the proprietor. The provisions of paragraph (a) and (c) of 
Sec. 19.319 shall be applicable to the filling and gauging of portable 
containers, and denatured spirits may be withdrawn from bonded premises 
for any lawful purpose on the filling gauge.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.463  Containers for denatured spirits.

    Packaging of denatured spirits and the marking of portable 
containers of such denatured spirits shall be in accordance with 
requirements of subpart R of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

                               Inventories

Sec. 19.464  Denatured spirits inventories.

    Each proprietor shall take a physical inventory of all denatured 
spirits in the processing account at the close of each calendar quarter 
and at such other times as the regional director (compliance) may 
require. The results of the inventory shall be recorded as provided in 
subpart W of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

                                Articles

Sec. 19.471  Manufacture of articles.

    Proprietors shall manufacture, label, mark, and dispose of articles 
as provided in 27 CFR part 20.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1372, as amended (26 U.S.C. 5273))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9160, Mar. 6, 1985]

                 Subpart O--Spirits from Customs Custody

Sec. 19.481  General.

    Spirits imported or brought into the United States in bulk 
containers may be withdrawn by proprietors from customs custody and 
transferred in such bulk containers or by pipeline without payment of 
tax to the bonded premises of their distilled spirits plant. Spirits 
received on bonded premises as provided in this section may be (a) 
redistilled or denatured only if 185 degrees or more of proof, and (b) 
withdrawn for any purpose authorized by 26 U.S.C. Chapter 51, in the 
same manner as domestic spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1366, as amended (26 U.S.C. 5232))

Sec. 19.482  Age and fill date.

    For the purpose of this part, the age and fill date for spirits that 
are imported or brought into the United States shall be:
    (a) Age. The claimed age, which is supported by the documentation 
required in 27 CFR part 5.

[[Page 347]]

    (b) Fill date. The date that packages of spirits are released from 
customs custody or filled on bonded premises.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.483  Recording gauge.

    (a) When packages of spirits are received from customs custody in 
the storage account, the proprietor shall use the last official gauge to 
compute and record on the deposit records prescribed in Sec. 19.740 for 
each entry the average content of the packages being received which 
shall also provide the basis for entries on the package summary records 
prescribed in Sec. 19.741. If the last official gauge indicates a 
substantial variation in the contents of the packages, the proprietor 
shall group the packages into lots according to their approximate 
contents, and assign a separate lot identification to each group of 
packages, based on the date the packages were received on bonded 
premises.
    (b) When packages of spirits are received from customs custody in 
the processing account, the proprietor shall determine the proof gallons 
of spirits received in each package. The determination may be made by 
use of the last official gauge.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5232))

                            Imported Spirits

Sec. 19.484  Marks on containers of imported spirits.

    (a) General. Each portable bulk container of spirits shall, when 
received on bonded premises under the provisions of Sec. 19.481, or when 
filled on bonded premises, be marked with:
    (1) The name of the importer;
    (2) The country of origin;
    (3) The kind of spirits;
    (4) The package identification number as provided in Sec. 19.593 or 
the package serial number as provided in Sec. 19.594;
    (5) If filled on bonded premises, the date of fill;
    (6) The proof; and
    (7) The proof gallons of spirits in the package. Package 
identification numbers or package serial numbers shall be preceded by 
the symbol ``IMP'' and any distinguishing prefix or suffix used as 
provided in Sec. 19.594. The proprietor who receives packages of 
imported spirits under the provisions of Sec. 19.481 shall be 
responsible for having the required marks placed on such packages. 
Package identification numbers assigned under the provisions of this 
section to packages of spirits received from customs custody shall be 
recorded on the deposit records by the proprietor who receives the 
spirits.
    (b) Exception. Proprietors are relieved from placing prescribed 
marks on packages when the spirits will be removed from the packages 
within 30 days of the date of receipt at the distilled spirits plant. 
Packages not dumped as provided in this paragraph within the time 
prescribed must be promptly marked in the manner required by 
Sec. 19.595. The provisions of this section shall not be construed to 
waive, or authorize the waiver of, the requirements of this part for the 
assigning of package identification numbers or for the recording of such 
package identification numbers on deposit records, and the required 
recording of lot identification numbers and related information on other 
transaction forms, records, or reports.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

                 Puerto Rican and Virgin Islands Spirits

Sec. 19.485  Marks on containers of Puerto Rican and Virgin Islands 
          spirits.

    (a) Packages received in bond. (1) When packages of Puerto Rican 
spirits are received on the bonded premises of a distilled spirits plant 
under the provisions of this subpart, the markings prescribed by 27 CFR 
250.40, modified to show the serial number of the Form 5110.31 prefixed 
by ``Form 5110.31'', rather than the serial number and identification of 
the Form 487-B, shall be accepted in lieu of the markings prescribed in 
Sec. 19.484. On receipt of packages so marked the proprietor of the 
distilled spirits plant shall show on such packages of spirits the date 
of fill as provided in Sec. 19.482, and the words ``Puerto Rican'' or 
the abbreviation ``P.R.''.

[[Page 348]]

    (2) When packages of Virgin Islands spirits are received on the 
bonded premises of a distilled spirits plant under the provisions of 
this subpart, the markings prescribed by 27 CFR 250.206 that are on such 
packages shall be accepted in lieu of the markings prescribed in 
Sec. 19.484. On receipt of packages so marked the proprietor of the 
distilled spirits plant shall show on such packages of spirits the date 
of fill as provided in Sec. 19.482, and the words ``VIRGIN ISLANDS'' or 
the abbreviation ``V.I.''
    (b) Portable bulk containers. Portable bulk containers of Puerto 
Rican or Virgin Islands spirits filled in ATF bond shall, in addition to 
the required marks prescribed in Sec. 19.596, be marked to show the 
serial number of the approved formula under which produced, and with the 
words ``PUERTO RICAN'' or ``VIRGIN ISLANDS'' or the abbreviation 
thereof. Portable bulk containers containing spirits received in ATF 
bond under the provisions of this subpart shall, in addition to other 
required marks, be marked with the words ``PUERTO RICAN'' or ``VIRGIN 
ISLANDS'' or the abbreviation thereof.
    (c) Cases of bottled alcohol. In addition to other mandatory marks 
prescribed by Sec. 19.608 for cases of bottled alcohol, the words 
``PUERTO RICAN'' or ``VIRGIN ISLANDS'', as appropriate, or the 
abbreviation ``P.R.'' or ``V.I.'' shall precede or follow the word 
``alcohol'' on cases of alcohol from Puerto Rico or the Virgin Islands 
that are bottled and cased on bonded premises.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1369, as amended 
(26 U.S.C. 5206, 5235))

Sec. 19.486  Additional tax on nonbeverage spirits.

    The additional tax imposed by 26 U.S.C. 5001(a)(9), on imported 
spirits withdrawn from customs custody without payment of tax and 
thereafter withdrawn from bonded premises for beverage purposes, and the 
related provisons of Sec. 19.518, are not applicable to Puerto Rican or 
Virgin Islands spirits brought into the United States and transferred to 
bonded premises under the provisions of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.487  Abatement, remission, credit or refund.

    The provisions of 26 U.S.C. 5008, authorizing abatement, remission, 
credit or refund for loss or destruction of distilled spirits, shall 
apply to spirits brought into the United States from Puerto Rico or the 
Virgin Islands, with respect to the following:
    (a) Spirits lost while in ATF bond;
    (b) Voluntary destruction of spirits in bond;
    (c) Spirits returned to bonded premises after withdrawal from bonded 
premises without payment of tax; and
    (d) Spirits returned to bonded premises after withdrawal from bonded 
premises upon tax determination.

Claims relating to spirits lost in bond, in addition to the information 
required by Sec. 19.41, shall show the name of the producer, and the 
serial number and date of the formula, where required, under which 
produced.

(Sec. 201, Pub. L. 95-859, 72 Stat. 1323, as amended (26 U.S.C. 5008); 
sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))

                   Subpart P--Transfer and Withdrawals

                                 General

Sec. 19.501  Authority to withdraw.

    Spirits, denatured spirits, and wines shall be removed from bonded 
premises as provided in this subpart. Spirits entered into bonded 
storage for subsequent packaging in wooden packages, as provided in 
Sec. 19.320, which have not been drawn into such packages at the time of 
withdrawal from bond shall be redesignated to conform to the classes and 
types set out in subpart R of this part and in 27 CFR part 5.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1362, as amended 
(26 U.S.C. 5201, 5212, 5214); sec. 807(a), Pub. L. 96-39, 93 Stat. 285 
(26 U.S.C. 5213))

Sec. 19.502  Withdrawal of spirits on production or filling gauge.

    When the production or filling gauge is made under the provisions of 
Sec. 19.319(b), spirits may be withdrawn from bonded premises for any 
lawful purpose on the production or filling gauge. When the production 
or filling

[[Page 349]]

gauge is made under Sec. 19.319(c), spirits may be withdrawn without 
payment of tax for export on the production or filling gauge. When 
spirits which are to be withdrawn on determination of tax on the 
original gauge are transferred in bond, all copies of the transfer 
record prescribed in Sec. 19.770 shall be marked by the proprietor 
``Withdrawal on Original Gauge''.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))

Sec. 19.503  Determination of tare.

    When packages are to be individually gauged for withdrawal from 
bonded premises, actual tare shall be determined in accordance with 27 
CFR part 30.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))

                    Transfers Between Bonded Premises

Sec. 19.505  Authorized transfers.

    (a) Spirits. Bulk spirits or denatured spirits may be transferred in 
bond between the bonded premises of plants qualified under 26 U.S.C. 
5171 or 26 U.S.C. 5181, in accordance with Secs. 19.506 and 19.998, 
respectively.
    (b) Wine. (1) Wines may be transferred (i) from a bonded wine cellar 
to the bonded premises of a distilled spirits plant, (ii) from the 
bonded premises of a distilled spirits plant to a bonded wine cellar, or 
(iii) between the bonded premises of distilled spirits plants.
    (2) Wines transferred to the bonded premises of a distilled spirits 
plant may be used in the manufacture of a distilled spirits product, and 
may not be removed from such bonded premises for consumption or sale as 
wine.
    (c) Alcohol for industrial purposes. Alcohol bottled for industrial 
purposes, as provided in Sec. 19.398, may be transferred between the 
bonded premises of distilled spirits plants in accordance with the 
procedures prescribed in Secs. 19.506 through 19.510 for bulk distilled 
spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1380, as amended 
(26 U.S.C. 5212, 5362); sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 
U.S.C. 5181))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-297, 55 
FR 18064, Apr. 30, 1990]

Sec. 19.506  Application to receive spirits in bond.

    When a proprietor qualified under 26 U.S.C. 5171 desires to have 
spirits or denatured spirits transferred to him in bond which shall not 
include spirits withdrawn from customs custody under 26 U.S.C. 5232, he 
shall make application for such transfer to the regional director 
(compliance) on Form 5100.16. Application to receive such spirits by 
transfer in bond shall not be approved unless the applicant's operations 
or unit bond is in the maximum penal sum, or, if in less than the 
maximum penal sum, is sufficient to cover the tax on the spirits or 
denatured spirits to be transferred in addition to all other liabilities 
chargeable against such bond. The applicant shall deliver one of the 
approved copies of the application to the consignor proprietor.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1318, as amended, 1362, as amended 
(26 U.S.C. 5005, 5112))

Sec. 19.507  Termination of application.

    A proprietor may terminate an approved application, Form 5100.16, at 
any time by
    (a) Retrieving the consignor's copy, and
    (b) Returning this copy, together with his own to the regional 
director (compliance) for cancellation.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1318, as amended (26 U.S.C. 5005))

Sec. 19.508  Consignor premises.

    (a) General. (1) A transfer record shall be prepared according to 
Sec. 19.770 by (i) the consignor proprietor of a distilled spirits plant 
(A) to cover the transfer of spirits or denatured spirits in bond to 
another distilled spirits plant, pursuant to an approved application on 
Form 5100.16, (B) to cover the transfer in bond of spirits or denatured 
spirits to an alcohol fuel plant, or (C) to cover the transfer of wine 
in bond to the bonded premises of a distilled spirits

[[Page 350]]

plant or bonded wine cellar; or (ii) the consignor proprietor of an 
alcohol fuel plant to cover the transfer of spirits to the bonded 
premises of a distilled spirits plant pursuant to an approved 
application on Form 5100.16. Except as otherwise provided herein, a 
transfer record shall be prepared for each conveyance. The proprietor 
shall also enter on the transfer record the serial numbers of any seals 
or other devices affixed to a conveyance used for shipment of spirits, 
or denatured spirits. On completion of lading (or completion of transfer 
by pipeline), the proprietor shall retain one copy of the transfer 
record and one copy of any accompanying document for his files and 
forward the original of the transfer record and any accompanying 
document to the consignee (to accompany the shipment, if by truck).
    (2) Spirits or denatured spirits produced from petroleum, natural 
gas, or coal may not be transferred to alcohol fuel plants qualified 
under 26 U.S.C. 5181.
    (3) The consignor proprietor may cover on one transfer record all 
packages of spirits shipped by truck on the same day from his bonded 
premises to the bonded premises of another plant. In such case, the 
proprietor shall prepare a shipment and delivery order for each 
shipment, showing the number of packages, their package identification 
or serial numbers, the name of the producer, warehouseman, or processor, 
and the serial numbers of the seals or other devices (if any) applied to 
the truck. Such shipping and delivery order shall be properly 
authenticated and shall consititute a complete record of the spirits so 
transferred in each truck each day. A copy of each shipping and delivery 
order shall be retained by the consignor. On completion of the lading of 
the last truck for the day, the proprietor shall retain one copy of the 
transfer record and one copy of any accompanying document for his files 
and forward the original of the transfer record and any accompanying 
document to the consignee.
    (b) Packages. When spirits are to be transferred in bond in 
packages, the consignor proprietor shall weigh each package, except (1) 
when the transfer is to be made in a secured conveyance, (2) when the 
individual packages have been securely sealed by the proprietor, or (3) 
when this requirement has been waived by the regional director 
(compliance) on a finding that, because of the location of the premises 
and the proposed method of operation, there will be no jeopardy to the 
revenue. When packages are weighed at the time of shipment, the 
proprietor shall assign temporary serial numbers to the packages and 
show for each package its gross shipment weight on a package gauge 
record prepared according to Sec. 19.769. A copy of the package gauge 
record shall accompany each copy of the transfer record.
    (c) Bulk conveyances and pipelines. When spirits, denatured spirits, 
or wines are to be transferred in bond in bulk conveyances or by 
pipelines, the consignor shall gauge the spirits, denatured spirits, or 
wines and record the quantity so determined on the transfer record 
prescribed in Sec. 19.770. Bulk conveyances of spirits or denatured 
spirits shall be secured by the proprietor.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1367, as amended, 1380, as amended 
(26 U.S.C. 5212, 5362))

Sec. 19.509  Reconsignment.

    Where, prior to or on arrival at the premises of a consignee, 
spirits, denatured spirits, or wines transferred in bond are found to be 
unsuitable for the purpose for which intended, were shipped in error, 
or, for any other bona fide reason, are not accepted by such consignee, 
or are not accepted by a carrier, they may be reconsigned, by the 
consignor, to himself, or to another consignee. In such case, 
application to receive spirits or denatured spirits by transfer in bond 
(on Form 5100.16) shall have been previously approved for the consignee 
(not required in the case of wines or in the case of alcohol fuel plants 
receiving spirits or denatured spirits) and the bond of the proprietor 
to whom the spirits, denatured spirits, or wines are reconsigned shall 
cover such spirits, denatured spirits, or wines while in transit after 
reconsignment. Notice of cancellation of the shipment shall be made by 
the consignor to the consignee. Where the reconsignment is to another 
proprietor, a new transfer

[[Page 351]]

record shall be prepared and prominently marked with the word 
``Reconsignment''.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1367, as amended, 1380, as amended 
(26 U.S.C. 5212, 5362))

Sec. 19.510  Consignee premises.

    (a) General. When spirits, denatured spirits, or wines are received 
by transfer in bond, the consignee proprietor shall examine each 
conveyance to determine whether the securing devices, if any, are intact 
upon arrival at his premises. If the securing devices are not intact, he 
shall immediately notify the area supervisor before removal of any 
spirits from the conveyance. The proprietor shall follow the provisions 
of subpart Q of this part to determine, record, and report losses, if 
any. After execution on the transfer record as prescribed in Sec. 19.770 
or Form 703, as appropriate, of his receipt of the shipment of spirits, 
denatured spirits, or wines, the consignee shall retain the original of 
the transfer record and any accompanying documents for his files, or 
dispose of Form 703 (in the case of wines from a bonded wine cellar), as 
provided in the instructions on the form. Retained copies of transfer 
records and Forms 703 shall become deposit records. Spirits which are 
produced at alcohol fuel plants shall be separately identified and 
accounted for as for fuel use, and may not be withdrawn, used, sold or 
otherwise disposed of for other than fuel use.
    (b) Packages. When spirits are received in packages, the consignee 
proprietor shall weigh each package, except: (1) when the transfer is 
made in a secured conveyance and the securing devices are intact on 
arrival, (2) when the individual packages have been sealed by the 
consignor proprietor and are intact on arrival, or (3) when the 
requirement for weighing the packages at the consignor premises has been 
waived under the provisions of Sec. 19.508(b)(3). The proprietor shall 
record the receiving weight of each package on the accompanying package 
gauge record or on a list with temporary package serial numbers prepared 
by the consignor. A copy of such package gauge record or list shall 
remain with the original of the transfer record.
    (c) Bulk conveyances and pipelines. When spirits, denatured spirits, 
or wines are received in bulk conveyances or by pipeline, the consignee 
shall gauge the spirits, denatured spirits, or wines and record the 
gauge on the transfer record prescribed in Sec. 19.770 or, in the case 
of wines received from a bonded wine cellar, on Form 703. The consignee 
shall ensure that each conveyance emptied has been thoroughly drained. 
The regional director (compliance) may waive the requirement for gauging 
spirits, denatured spirits, or wines on receipt by pipeline if he finds 
that because of the location of the premises, there will be no jeopardy 
to the revenue.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1380, as amended 
(26 U.S.C. 5204, 5362); sec. 807(a), Pub. L. 96-39, 93 Stat. 285 (26 
U.S.C. 5213))

             Withdrawals on Determination and Payment of Tax

Sec. 19.515  Determination and payment of tax.

    (a) General. Distilled spirits may be withdrawn from bonded premises 
on determination of tax in approved containers, or, to the contiguous 
premises of a manufacturer of nonbeverage products, by pipeline. All tax 
which is to be prepaid or deferred shall be determined prior to the 
physical removal of the spirits from bonded premises. The proprietor 
shall record the results of each tax determination on a record of tax 
determination as required by Sec. 19.761.
    (b) Payment of tax. The tax on the spirits shall be prepaid on Form 
5000.24 before removal of the spirits from bonded premises unless the 
proprietor has furnished a withdrawal or unit bond to secure payment of 
the tax. Where such bond is in less than the maximum penal sum, the 
proprietor shall prepay the tax for any withdrawal which would cause the 
outstanding liability for tax to exceed the limits of coverage under the 
bond.

(Sec. 807, Pub. L. 96-39, 93 Stat. (26 U.S.C. 5213))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50 
FR 51387, Dec. 17, 1985]

[[Page 352]]

Sec. 19.516  Bond account.

    Where the proprietor has furnished a withdrawal or unit bond to 
cover the tax on spirits withdrawn on determination of tax, and such 
bond is in less than the maximum penal sum, he shall maintain an account 
of his bond and he shall charge the bond with the amount of liability 
incurred on each withdrawal on determination of tax. He shall credit the 
bond on payment of the amount of tax required to be remitted with a 
return and by authorized credits taken on a return. Where a bond in less 
than the maximum penal sum has been allocated among two or more plants, 
as provided in Secs. 19.243 and 19.244, the proprietor shall maintain an 
account at each plant of that part of the penal sum allocated to that 
plant.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.517  Gauge for tax determination.

    (a) Packages. When spirits in packages are to be withdrawn from 
bonded premises on determination of tax on the basis of an individual 
package gauge, each package shall be gauged unless the tax is to be 
determined on the production or filling gauge. When packages are gauged, 
the proprietor shall prepare a package gauge record, according to 
Sec. 19.769, and attach it to the record of tax determination prescribed 
in Sec. 19.761.
    (b) Tanks. Spirits in tanks which are to be withdrawn on 
determination of tax shall be gauged (by weighing and proofing) as 
prescribed in Sec. 19.93, and the elements of the gauge shall be 
recorded on the record of tax determination or on a separate record of 
the gauge for attachment to the record of tax determination.
    (c) Cases. Cases of distilled spirits to be withdrawn from bonded 
premises shall be tax determined on the basis of the contents thereof. 
The proof gallonage contained in cases shall be determined in accordance 
with 27 CFR part 30 and the method prescribed in Sec. 19.722.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358 (26 U.S.C. 5204); sec. 807, 
Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5213))

Sec. 19.518  Imported spirits.

    When spirits which have been imported for nonbeverage purposes and 
transferred to bonded premises pursuant to 26 U.S.C. 5232 are withdrawn 
for beverage purposes, there shall be paid, in addition to the internal 
revenue tax imposed by 26 U.S.C. 5001, a tax equal to the duty which 
would have been paid had the spirits been imported for beverage 
purposes, less the duty already paid thereon. The additional tax shall 
be referred to as ``additional tax--less duty'', and shall be paid at 
the time and in the manner that the basic tax is paid. The total 
quantity in proof gallons withdrawn shall be the basis of computing the 
tax at the rates indicated. The amount of the ``additional tax--less 
duty'' shall be stated separately and identified as such on the tax 
return.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001))

Sec. 19.519  Methods of tax payment.

    The tax on spirits shall be paid pursuant to a return on Form 
5000.24, filed as provided in Sec. 19.523 or Sec. 19.524 and 
Sec. 19.525. Except for remittance to be effected by electronic fund 
transfer under Sec. 19.524, remittance for the tax in full shall 
accompany the return and may be in any form which the regional director 
(compliance) is authorized to accept under the provisions of Sec. 70.61 
(Payment by check or money order) and which is acceptable to him. 
However, where a check or money order tendered in payment for taxes is 
not paid on presentment, or where the taxpayer is otherwise in default 
in payment, any remittance made during the period of such default, and 
until the regional director (compliance) finds that the revenue will not 
be jeopardized by the acceptance of a personal check (if acceptable to 
the regional director (compliance)), shall be in cash or in the form of 
a certified, cashier's, or treasurer's check drawn on any bank or trust 
company incorporated under the laws of the United States, or under the 
laws of any State, Territory, or possession of the United States, or a 
money order, as provided in Sec. 70.61. Checks and money orders shall be 
made payable to

[[Page 353]]

``Bureau of Alcohol, Tobacco and Firearms''.

(Act of August 16, 1954, Ch. 736, 68A Stat. 777, as amended (26 U.S.C. 
6311); sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 
5061))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50 
FR 51387, Dec. 17, 1985; T.D. ATF-251, 52 FR 19313, May 22, 1987; T.D. 
ATF-301, 55 FR 47605, Nov. 14, 1990]

Sec. 19.520  Employer identification number.

    The employer identification number (defined at 26 CFR 301.7701-12) 
of the taxpayer who has been assigned such a number shall be shown on 
each return on Form 5000.24 filed pursuant to the provisions of this 
part. Failure of the taxpayer to include his employer identification 
number on Form 5000.24 may result in assertion and collection of the 
penalty specified in Sec. 70.113 of this chapter.

(Sec. 1, Pub. L. 87-397, 75 Stat. 828, as amended (26 U.S.C. 6109, 
6676))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50 
FR 51387, Dec. 17, 1985; T.D. ATF-301, 55 FR 47605, Nov. 14, 1990]

Sec. 19.521  Application for employer identification number.

    (a) An employer identification number will be assigned pursuant to 
application on Form SS-4 filed by the taxpayer. Form SS-4 may be 
obtained from the director of the service center or from the district 
director.
    (b) An application on Form SS-4 for an employer identification 
number shall be made by every taxpayer who files a return on Form 
5000.24, but who prior to the filing of his first return on Form 5000.24 
has neither secured an employer identification number nor made 
application therefor. Such application on Form SS-4 shall be filed on or 
before the seventh day after the date on which such first return on Form 
5000.24 is filed.
    (c) Each taxpayer shall make application for and shall be assigned 
only one employer identification number, regardless of the number of 
places of business for which the taxpayer is required to file a tax 
return under the provisions of this part.

(Sec. 1, Pub. L. 87-397, 75 Stat. 828, as amended (26 U.S.C. 6109))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50 
FR 51387, Dec. 17, 1985]

Sec. 19.522  Taxes to be collected by returns.

    (a) Deferred taxes. The tax on spirits to be withdrawn from bond for 
deferred payment of tax shall be paid pursuant to a semimonthly return 
on Form 5000.24. Except as provided in section 19.523(c), the periods to 
be covered by semimonthly returns on Form 5000.24 shall run from the 1st 
day through the 15th day of each month, and from the 16th day through 
the last day of each month. A return, Form 5000.24, shall be executed 
and filed for each semimonthly return period notwithstanding that no tax 
is due for payment for such period. The proprietor of each bonded 
premises shall include, for payment, on his semimonthly return on Form 
5000.24, the full amount of distilled spirits tax determined in respect 
of all spirits released for withdrawal from the bonded premises on 
determination of tax during the period covered by the return (except 
spirits on which tax has been prepaid).
    (b) Conditions under which deferral is denied. Notwithstanding the 
posting of a withdrawal or unit bond by the proprietor, the tax shall be 
prepaid as provided in paragraph (c) of this section--
    (1) Where a proprietor has defaulted in any payment of tax under 
this section, during the period of such default and until the regional 
director (compliance) finds that the revenue will not be jeopardized by 
deferral; or
    (2) Where a proprietor, who, after having been notified of his 
deficiency by the regional director (compliance) (i) fails to maintain 
records required by this part to substantiate the correctness of his tax 
returns or (ii) otherwise fails to comply with any provisions of this 
part, is so notified by the regional director (compliance).
    (c) Prepaid taxes. The tax on distilled spirits shall be paid 
pursuant to a prepayment return on Form 5000.24 in all cases where the 
tax is required to be paid before the spirits are withdrawn from bond. A 
single prepayment return on Form 5000.24 may cover one or more

[[Page 354]]

transactions. The proprietor shall note the serial number of the Form 
5000.24 and the date and time such prepayment return was filed on the 
individual record of tax determination.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended, 1395, as amended 
(26 U.S.C. 5061, 5555))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50 
FR 51387, Dec. 17, 1985; T.D. ATF-365 60 FR 33668, June 28, 1995]

Sec. 19.523  Time for filing returns.

    (a) Payment pursuant to semimonthly return. Where the proprietor of 
bonded premises has withdrawn spirits from such premises on 
determination and before payment of tax, the proprietor shall file a 
semimonthly tax return covering such spirits on Form 5000.24, and 
remittance, as required by Sec. 19.524 or Sec. 19.525, not later than 
the 14th day after the last day of the return period, except as provided 
by paragraph (c) of this section. If the due date falls on a Saturday, 
Sunday, or legal holiday, the return and remittance shall be due on the 
immediately preceding day which is not a Saturday, Sunday, or legal 
holiday, except as provided by paragraph (c)(3) of this section.
    (b) Payment pursuant to prepayment return. If the proprietor of a 
distilled spirits plant desires to withdraw spirits from bonded premises 
on determination of tax and does not have on file an approved withdrawal 
or unit bond of sufficient penal sum to cover the withdrawal, if there 
is default by him in any payment of tax under this part, or the 
proprietor is notified by the regional director (compliance) as provided 
in Sec. 19.522(b)(2), the proprietor shall not remove the spirits from 
the bonded premises until the tax thereon has been paid. To pay the tax, 
the proprietor of the bonded premises shall file a prepayment return on 
Form 5000.24, and remittance as required by Sec. 19.524 or Sec. 19.525, 
before removal of the spirits.
    (c) Special rule for taxes due for the month of September (effective 
after December 31, 1994). (1)(i) Except as provided in paragraph 
(c)(1)(ii) of this section, the second semimonthly period for the month 
of September shall be divided into two payment periods, from the 16th 
day through the 26th day, and from the 27th day through the 30th day. 
The proprietor shall file a return on Form 5000.24, and make remittance, 
for the period September 16-26, no later than September 29. The 
proprietor shall file a return on Form 5000.24, and make remittance, for 
the period September 27-30, no later than October 14.
    (ii) Taxpayment not by electronic fund transfer. In the case of 
taxes not required to be remitted by electronic fund transfer as 
prescribed by Sec. 19.524, the second semimonthly period of September 
shall be divided into two payment periods, from the 16th day through the 
25th day, and the 26th day through the 30th day. The proprietor shall 
file a return on Form 5000.24, and make remittance, for the period 
September 16-25, no later than September 28. The proprietor shall file a 
return on Form 5000.24, and make remittance, for the period September 
26-30, no later than October 14.
    (2) Amount of payment: Safe harbor rule. (i) Taxpayers are 
considered to have met the requirements of paragraph (c)(1)(i) of this 
section, if the amount paid no later than September 29 is not less than 
\11/15\ (73.3 percent) of the tax liability incurred for the semimonthly 
period beginning on September 1 and ending on September 15, and if any 
underpayment of tax is paid by October 14.
    (ii) Taxpayers are considered to have met the requirements of 
paragraph (c)(1)(ii) of this section, if the amount paid no later than 
September 28 is not less than 2/3rds (66.7 percent) of the tax liability 
incurred for the semimonthly period beginning on September 1 and ending 
on September 15, and if any underpayment of tax is paid by October 14.
    (3) Last day for payment. If the required taxpayment due date for 
the periods September 16-25 or September 16-26 as applicable, falls on a 
Saturday or legal holiday, the return and remittance shall be due on the 
immediately preceding day. If the required due date falls on a Sunday, 
the return and remittance shall be due on the immediately following day.
    (4) Example. Payment of tax for the month of September. (i) Facts. 
X, a distilled spirits plant proprietor required

[[Page 355]]

to pay taxes by electronic fund transfer, incurred tax liability in the 
amount of $30,000 for the first semimonthly period of September. For the 
period September 16-26, X incurred tax liability in the amount of 
$45,000, and for the period September 27-30, X incurred tax liability in 
the amount of $2,000.
    (ii) Payment requirement. X's payment of tax in the amount of 
$30,000 for the first semimonthly period of September is due no later 
than September 29 (Sec. 19.522(a)). X's payment of tax for the period 
September 16-26 is also due no later than September 29 
(Sec. 19.523(c)(1)(i)). X may use the safe harbor rule to determine the 
amount of payment due for the period of September 16-26 
(Sec. 19.523(c)(2)). Under the safe harbor rule, X's payment of tax must 
equal $21,990.00, 11/15ths of the tax liability incurred during the 
first semimonthly period of September. Additionally, X's payment of tax 
in the amount of $2,000 for the period September 27-30 must be paid no 
later than October 14 (Sec. 19.523(c)(1)(i)). X must also pay the 
underpayment of tax, $23,010.00, for the period September 16-26, no 
later than October 14 (Sec. 19.523(c)(2)).

(Approved by the Office of Management and Budget under control number 
1512-0467)

[T.D. ATF-219, 50 FR 51387, Dec. 17, 1985, as amended by T.D. ATF-246, 
52 FR 668, Jan. 8, 1987; T.D. ATF-365, 60 FR 33668, June 28, 1995]

Sec. 19.524  Payment of tax by electronic fund transfer.

    (a) General. (1) Each taxpayer who was liable, during a calendar 
year, for a gross amount equal to or exceeding five million dollars in 
distilled spirits taxes combining tax liabilities incurred under this 
part and parts 250 and 251 of this chapter, shall use a commercial bank 
in making payment by electronic fund transfer (EFT) of distilled spirits 
taxes during the succeeding calendar year. Payment of distilled spirits 
taxes by cash, check, or money order, as described in Sec. 19.525, is 
not authorized for a taxpayer who is required, by this section, to make 
remittances by EFT. For purposes of this section, the dollar amount of 
tax liability is defined as the gross tax liability on all taxable 
withdrawals and importations (including distilled spirits products 
brought into the United States from Puerto Rico or the Virgin Islands) 
during the calendar year, without regard to any drawbacks, credits, or 
refunds, for all premises from which such activities are conducted by 
the taxpayer. Overpayments are not taken into account in summarizing the 
gross tax liability.
    (2) For the purposes of this section, a taxpayer includes a 
controlled group of corporations, as defined in 26 U.S.C. 1563, and 
implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except 
that the words ``at least 80 percent'' shall be replaced by the words 
``more than 50 percent'' in each place it appears in subsection (a) of 
26 U.S.C. 1563, as well as in the implementing regulations. Also, the 
rules for a ``controlled group of corporations'' apply in a similar 
fashion to groups which include partnerships and/or sole 
proprietorships. If one entity maintains more than 50% control over a 
group consisting of corporations and one, or more, partnerships and/or 
sole proprietorships, all of the members of the controlled group are one 
taxpayer for the purpose of determining who is required to make 
remittances by EFT.
    (3) A taxpayer who is required by this section to make remittances 
by EFT, shall make a separate EFT remittance and file a separate return, 
ATF F 5000.24, for each distilled spirits plant from which spirits are 
withdrawn upon determination of tax.
    (b) Requirements. (1) On or before January 10 of each calendar year, 
except for a taxpayer already remitting the tax by EFT, each taxpayer 
who was liable for a gross amount equal to or exceeding five million 
dollars in distilled spirits taxes during the previous calendar year, 
combining tax liabilities incurred under this part and parts 250 and 251 
of this chapter, shall notify the regional director (compliance), for 
each region in which taxes are paid. The notice shall be an agreement to 
make remittances by EFT.
    (2) For each return filed in accordance with this part, the taxpayer 
shall direct the taxpayer's bank to make an electronic fund transfer in 
the amount of the taxpayment to the Treasury Account as provided in 
paragraph (e) of this section. The request shall be made

[[Page 356]]

to the bank early enough for the transfer to be made to the Treasury 
Account by no later than the close of business on the last day for 
filing the return, prescribed in Sec. 19.523. The request shall take 
into account any time limit established by the bank.
    (3) If a taxpayer was liable for less than five million dollars in 
distilled spirits taxes during the preceding calendar year, combining 
tax liabilities incurred under this part and parts 250 and 251 of this 
chapter, the taxpayer may choose either to continue remitting the tax as 
provided in this section or to remit the tax with the return as 
prescribed by Sec. 19.525. Upon filing the first return on which the 
taxpayer chooses to discontinue remitting the tax by EFT and to begin 
remitting the tax with the tax return, the taxpayer shall notify the 
regional director (compliance) by attaching a written notification to 
ATF F 5000.24, stating that no taxes are due by EFT, because the tax 
liability during the preceding calendar year was less than five million 
dollars, and that the remittance shall be filed with the tax return.
    (c) Remittance. (1) Each taxpayer shall show on the return, ATF F 
5000.24, information about remitting the tax for that return by EFT and 
shall file the return with ATF, in accordance with the instructions on 
ATF F 5000.24.
    (2) Remittances shall be considered as made when the taxpayment by 
electronic fund transfer is received by the Treasury Account. For 
purposes of this section, a taxpayment by electronic fund transfer shall 
be considered as received by the Treasury Account when it is paid to a 
Federal Reserve Bank.
    (3) When the taxpayer directs the bank to effect an electronic fund 
transfer message as required by paragraph (b)(2) of this section, any 
transfer data record furnished to the taxpayer, through normal banking 
procedures, will serve as the record of payment, and shall be retained 
as part of required records.
    (d) Failure to make a taxpayment by EFT. The taxpayer is subject to 
a penalty imposed by 26 U.S.C. 5684, 6651, or 6656, as applicable, for 
failure to make a taxpayment by EFT on or before the close of business 
on the prescribed last day for filing.
    (e) Procedure. Upon the notification required under paragraph (b)(1) 
of this section, the regional director (compliance) will issue to the 
taxpayer an ATF Procedure entitled, Payment of Tax by Electronic Fund 
Transfer. This publication outlines the procedure a taxpayer is to 
follow when preparing returns and EFT remittances in accordance with 
this part. The U.S. Customs Service will provide the taxpayer with 
instructions for preparing EFT remittances for payments to be made to 
the U.S. Customs Service.

(Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302); 
sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5061))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985; 50 
FR 23949, June 7, 1985, as amended by T.D. ATF-219, 50 FR 51388, Dec. 
17, 1985; T.D. ATF-245, 52 FR 532, Jan. 7, 1987; T.D. ATF-251, 52 FR 
19313, May 22, 1987; T.D. ATF-262, 52 FR 47559, Dec. 15, 1987]

Sec. 19.525  Manner of filing returns.

    (a) Each return on Form 5000.24 shall be filed with the ATF, in 
accordance with the instructions on the form. If the return and 
remittance are to be filed with a designated ATF Officer, the proprietor 
shall file the return and remittance no later than 2:00 p.m. on the date 
the return is required to be filed.
    (b) When the proprietor sends the return on Form 5000.24 by U.S. 
mail, the official postmark of the U.S. Postal Service stamped on the 
cover in which the return was mailed shall be considered the date of 
delivery of the remittance. When the postmark on the cover is illegible, 
the burden of proving when the postmark was made will be on the 
proprietor. When the proprietor sends the return with or without 
remittance by registered mail or by certified mail, the date of registry 
or the date of the postmark on the sender's receipt of certified mail, 
as the case may be, shall be treated as the date of delivery of the 
return and, if accompanied, of the remittance.


[[Page 357]]


(Aug. 16, 1954, ch. 736, 68A Stat. 775, as amended (26 U.S.C. 6302))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50 
FR 51388, Dec. 17, 1985; T.D. ATF-251, 52 FR 19313, May 22, 1987]

Sec. 19.526  Removal of spirits on tax determination.

    No spirits shall be removed from bonded premises, except as 
otherwise provided by law, unless the tax thereon has been paid or 
determined. A record of tax determination shall be prepared for each 
removal of spirits as provided in Sec. 19.76.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5205); 
sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5213))

              Withdrawal of Spirits Without Payment of Tax

Sec. 19.531  Authorized withdrawals without payment of tax.

    Spirits may be withdrawn from bonded premises, without payment of 
tax for:
    (a) Export, as authorized under 26 U.S.C. 5214(a)(4);
    (b) Transfer to customs manufacturing bonded warehouses, as 
authorized under 19 U.S.C. 1311;
    (c) Transfer to foreign-trade zones, as authorized under 19 U.S.C. 
81c;
    (d) Supplies for certain vessels and aircraft, as authorized under 
19 U.S.C. 1309;
    (e) Transfer to customs bonded warehouses, as authorized under 26 
U.S.C. 5066 or 5214(a)(9);
    (f) Use in wine production, as authorized under 26 U.S.C. 5373;
    (g) Transfer to any university, college of learning, or institution 
of scientific research for experimental or research use as authorized 
under 26 U.S.C. 5312(a);
    (h) Research, development or testing, as authorized under 26 U.S.C. 
5214(a)(10). The withdrawal of spirits as provided in paragraphs (a) 
through (e) of this section shall be in accordance with the regulations 
in 27 CFR part 252; or,
    (i) Use in the production on bonded wine cellar premises of wine and 
wine products which will be rendered unfit for beverage use, as 
authorized by 26 U.S.C. 5362(d). The withdrawal of spirits as provided 
in paragraphs (a) through (e) of this section shall be in accordance 
with the regulations in part 252 of this chapter.

(Sec. 311, Tariff Act of 1930, 46 Stat. 691, as amended (19 U.S.C. 
1311); sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1375, as 
amended, 1382, as amended (26 U.S.C. 5214, 5312, 5373); sec. 3, Pub. L. 
91-659, 84 Stat. 1965, as amended (26 U.S.C. 5066); sec. 455, Pub. L. 
98-369, 98 Stat. 494 (26 U.S.C. 5214))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-227, 51 
FR 13216, Apr. 18, 1986]

Sec. 19.532  Withdrawals of spirits for use in wine production.

    Wine spirits may be withdrawn to a bonded wine cellar without 
payment of tax for use in wine production. When wine spirits are 
consigned, the proprietor shall prepare a transfer record according to 
Sec. 19.770. Unless wine spirits in packages are to be withdrawn on the 
production or filling gauge, the proprietor shall prepare a package 
gauge record according to Sec. 19.769 and attach it to the transfer 
record.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1382, as amended 
(26 U.S.C. 5214, 5373))

Sec. 19.533  Withdrawal of spirits without payment of tax for 
          experimental or research use.

    Any scientific university, college of learning, or institution of 
scientific research (which has qualified under the provisions of 
Sec. 19.71 to withdraw spirits from a bonded premises), desiring to 
withdraw a specific quantity of spirits for experimental or research 
use, shall file a letterhead application with the regional director 
(compliance) of the region in which the applicant's premises are 
located.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C. 5312))

Sec. 19.534  Withdrawals of spirits for use in production of nonbeverage 
          wine and nonbeverage wine products.

    Spirits withdrawn without payment of tax may be removed, pursuant to 
the provisions of part 24 of this chapter, to

[[Page 358]]

a bonded wine cellar for use in the production of nonbeverage wine and 
nonbeverage wine products. (Sec. 455, Pub. L. 98-369, 98 Stat. 494 (26 
U.S.C. 5214))


[T.D. 372, 61 FR 20724, May 8, 1996]

                    Withdrawal of Spirits Free of Tax

Sec. 19.536  Authorized withdrawals free of tax.

    Pursuant to the regulations in this chapter, spirits may be 
withdrawn from bonded premises free of tax--
    (a) On receipt of a signed photocopy of a permit, issued under part 
22 of this chapter, to procure spirits for nonbeverage purposes and not 
for resale or use in the manufacture of any product for sale, as 
provided in 26 U.S.C. 5214(a)(3);
    (b) On receipt of a signed photocopy of a permit, issued under part 
22 of this chapter, to procure spirits by and for the use of the United 
States or any governmental agency, any State, any political division of 
a State, or the District of Columbia, for nonbeverage purposes as 
provided in 26 U.S.C. 5214(a)(2);
    (c) On receipt of a valid permit, issued under this part, to procure 
spirits by and for the use of the United States, under the provisions of 
26 U.S.C. 7510, for purposes other than as provided in paragraph (b) of 
this section and 26 U.S.C. 5214(a)(2);
    (d) After being specially denatured--
    (1) On receipt of a signed photocopy of a permit to procure 
specially denatured spirits, issued under part 20 of this chapter.
    (2) For export;
    (e) After being completely denatured, for any lawful purpose;
    (f) When contained in an article.

(Act of August 16, 1954, Ch. 736, 68A Stat. 900 (26 U.S.C. 7510); sec. 
201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9160, Mar. 6, 1985]

Sec. 19.537  Withdrawal of spirits free of tax.

    Spirits withdrawn free of tax under Sec. 19.536 (a), (b), or (c) 
shall be withdrawn in approved containers and shipped to the consignee 
designated in the permit. Unless the spirits are in cases or are to be 
withdrawn on the production or filling gauge, the proprietor shall gauge 
each container. If the spirits are in packages which are to be gauged, 
the proprietor shall prepare a package gauge record according to 
Sec. 19.769, and attach it to the record of shipment. For each shipment 
the proprietor shall prepare a record of shipment (shipping invoice, 
bill of lading, or another document intended for the same purpose) and 
forward the original to the consignee, in accordance with Sec. 19.779. 
Bulk conveyances used to transport spirits withdrawn free of tax under 
this section shall be secured in accordance with Sec. 19.96.

(Approved by the Office of Management and Budget under control number 
1512-0334)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214))

[T.D. ATF-199, 50 FR 9160, Mar. 6, 1985]

Sec. 19.538  Withdrawal of spirits by the United States.

    (a) Nonbeverage use. (1) Government agencies of the United States, 
intending to procure specially denatured spirits or spirits free of tax 
for nonbeverage purposes, shall make application for and receive a 
permit, Form 5150.33, from the Director. Permits may be issued to 
Government agencies of the United States for:
    (i) Withdrawal and use of specially denatured spirits, in accordance 
with part 20 of this chapter;
    (ii) Withdrawal and use of alcohol free of tax for nonbeverage 
purposes, in accordance with part 22 of this chapter; or
    (iii) Importation and use of alcohol free of tax for nonbeverage 
purposes, in accordance with part 251 of this chapter.
    (2) All permits previously issued to Government agencies of the 
United States for use of spirits or specially denatured spirits on Form 
1444 shall remain valid and will be regulated by the same provisions of 
this chapter as it refers to permits on Form 5150.33.
    (3) A Government agency shall forward a signed copy of its permit, 
Form 5150.33, for retention by the proprietor of the distilled spirits 
plant for the initial purchase. Subsequent orders with the same vendor 
shall refer to the permit number.

[[Page 359]]

    (4) In the case of a Government agency holding a single permit for 
use of other sub-agencies, the signed copy of the permit shall contain 
an attachment listing all other locations authorized to procure spirits 
under that permit.
    (5) For each shipment under this section, the proprietor shall 
prepare a record of shipment and forward the original to the consignee 
agency, in accordance with Sec. 19.779.
    (b) Beverage use. (1) Distilled spirits may be withdrawn free of 
tax, under 26 U.S.C. 7510, for use for beverage purposes by Government 
agencies of the United States on receipt of a proper Government purchase 
order signed by the head of the agency, or an authorized delegate.
    (2) For each withdrawal under paragraph (b)(1) of this section, each 
case removed shall be plainly marked ``For Use of the United States'' in 
addition to the marks required by subpart R of this part.
    (3) For each withdrawal under paragraph (b)(1) of this section, the 
proprietor shall prepare a record containing the information required by 
Sec. 19.761 for a record of tax determination. The proprietor shall mark 
this record ``Free of Tax For Use of the United States.''

(Act of August 16, 1954, Ch. 736, 68A Stat. 900 (26 U.S.C. 7510); sec. 
201, Pub. L. 85-859, 72 Stat. 1370, as amended, 1375, as amended (26 
U.S.C. 5271, 5313))

[T.D. T.D. ATF-199, 50 FR 9160, Mar. 6, 1985]

Sec. 19.539  Disposition of excess spirits.

    Upon discontinuance of use of spirits or specially denatured spirits 
withdrawn free of tax under Sec. 19.538, a Government agency may dispose 
of excess spirits (a) to another Government agency (the receiving agency 
is required to have a permit under part 20 or 22 if the spirits were 
withdrawn for nonbeverage purposes), (b) by returning the spirits to the 
proprietor of a distilled spirits plant, or (c) in any manner authorized 
by the Director. In no case may such spirits be disposed of to the 
general public, or otherwise than as provided in this section.

(Act of August 16, 1954, Ch. 736, 68A Stat. 900 (26 U.S.C. 7510); sec. 
201, Pub. L. 85-859, 72 Stat. 1370, as amended, 1375, as amended (26 
U.S.C. 5271, 5313))

[T.D. ATF-199, 50 FR 9161, Mar. 6, 1985]

Sec. 19.540  Removal of denatured spirits and articles.

    (a) Specially denatured spirits. (1) Specially denatured spirits 
withdrawn free of tax under Sec. 19.536(d) shall be shipped in approved 
containers to the consignee designated on the permit. If such spirits 
are for export or for transfer to a foreign-trade zone for export or for 
storage pending exportation, they shall be withdrawn under the 
applicable provisions of part 252 of this chapter.
    (2) Domestic specially denatured spirits may be transferred to 
qualified users located in a foreign-trade zone for use in the 
manufacture of articles under the applicable provisions of part 20 of 
this chapter. The alcohol, as defined in 27 CFR part 20, in domestic 
specially denatured spirits must be produced entirely in the United 
States, including Puerto Rico.
    (3) When specially denatured spirits are shipped to a qualified 
user, dealer, or an applicant or prospective applicant under paragraph 
(c)(2)(ii) of this section, the proprietor shall prepare a record of 
shipment in accordance with Sec. 19.779. Bulk conveyances used to 
transport specially denatured spirits shall be secured in accordance 
with the provisions of Sec. 19.96.
    (b) Completely denatured alcohol. No permit, application, or notice 
is required for removal of completely, denatured alcohol from bonded 
premises.
    (c) Samples of denatured spirits. (1) The proprietor may take 
samples of denatured spirits free of tax which may be necessary for the 
conduct of business.
    (2) The proprietor may furnish samples of specially denatured 
spirits:
    (i) To dealers in, and users of, specially denatured spirits in 
advance of sales; or
    (ii) To applicants or prospective applicants for permits to use 
specially denatured spirits, for experimental purposes or for use in 
preparing samples of a finished product for submission on request by the 
Director.
    (A) Proprietors shall maintain records to ensure that samples of 
specially denatured spirits dispensed to a

[[Page 360]]

nonpermittee do not exceed five gallons per calendar year. Records of 
samples of less than five gallons shall be maintained as provided in 
Sec. 19.766.
    (B) Samples in excess of five gallons may be furnished to 
nonpermittees only after the consignee provides the proprietor with a 
letterhead application approved by the regional director (compliance) 
under Sec. 20.252 of this chapter. The proprietor shall retain the 
approved letterhead application on file as a part of the record of 
transaction.
    (C) For each shipment of a sample in excess of five gallons under 
paragraph (c)(2)(ii)(B) of this section, the proprietor shall prepare a 
record of shipment and forward the original to the consignee, in 
accordance with Sec. 19.779.
    (3) Each sample of specially denatured spirits withdrawn under the 
provisions of paragraph (c)(2) of this section shall have a label 
affixed showing the following information:
    (i) The word ``Sample'', and the words ``Specially Denatured 
Alcohol'', or ``Specially Denatured Rum'', whichever is applicable;
    (ii) The name, address, and plant number of the proprietor; and
    (iii) The formula number.
    (d) Articles. Removal of articles from bonded premises shall be in 
accordance with the provisions of part 20 of this chapter.

(Approved by the Office of Management and Budget under control number 
1512-0337)

(48 Stat. 999, as amended, 72 Stat. 1362, as amended, 1370, as amended 
(19 U.S.C. 81c; 26 U.S.C. 5214, 5271))

[T.D. ATF-199, 50 FR 9161, Mar. 1, 1985; 50 FR 20099, May 14, 1985, as 
amended by T.D. ATF-274, 53 FR 25156, July 5, 1988]

Sec. 19.541  Reconsignment.

    (a) Reconsignment. When, prior to or on arrival at the consignee's 
premises, spirits or specially denatured spirits withdrawn free of tax 
under Sec. 19.536 are not accepted by the consignee or by a carrier, the 
spirits may be reconsigned (1) to the consignor, (2) to another 
proprietor for return to the bonded premises under the provisions of 
Sec. 19.685, or (3) to another permittee holding a valid permit issued 
under part 20 or 22 of this chapter, as applicable.
    (b) Consent of surety. In case of reconsignment to bonded premises, 
the provisions of Sec. 19.685, relating to consent of surety in respect 
to return of spirits or specially denatured spirits withdrawn free of 
tax, are applicable.
    (c) Records of reconsignment. In the case of reconsignment, the 
consignor shall cancel the initial record of shipment and prepare a new 
record of shipment, if shipment is to another permittee or proprietor. 
The new record of shipment shall be marked ``Reconsignment.'' File 
copies of the canceled and the new record of shipment will be annotated 
to cross reference each other.

(Records relating to tax-free alcohol approved by the Office of 
Management and Budget under control number 1512-0334; records relating 
to specially denatured spirits approved by the Office of Management and 
Budget under control number 1512-0337)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-199, 50 FR 9161, Mar. 6, 1985]

                     Subpart Q--Losses and Shortages

                                 Losses

Sec. 19.561  Losses in general.

    (a) Allowable losses. Except as provided in paragraph (b) of this 
section, tax shall not be collected or, if paid, the tax shall be 
refunded when spirits, denatured spirits or wines are lost or destroyed 
while in bond.
    (b) Exceptions. Tax shall be collected in the case of:
    (1) Theft, unless the regional director (compliance) finds that the 
theft occurred without connivance, collusion, fraud or negligence on the 
part of the proprietor, owner, consignor, consignee, bailee, or carrier, 
or the employees or agents of any of them;
    (2) Voluntary destruction carried out other than as provided in 
subpart U of this part;
    (3) Unexplained shortage of bottled spirits.
    (c) Burden of proof. When it appears that a loss occurred due to 
theft, the burden of proof shall be on the proprietor or other person 
liable for the tax to establish to the satisfaction of the regional 
director (compliance) that the loss did not result from connivance, 
collusion, fraud, or negligence on the

[[Page 361]]

part of the proprietor, owner, consignor, consignee, bailee, or carrier, 
or the employees or agents of any of them.
    (d) Claims for losses allowable under this section shall be filed in 
accordance with applicable provisions of subpart C of this part.
    (e) Limitations. The abatement, remission, credit, or refund of 
taxes on spirits, denatured spirits, or wines lost by theft shall be 
allowed only to the extent that the claimant is not indemnified against 
or recompensed for the taxes.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1381, as amended 
(26 U.S.C. 5008, 5370))

Sec. 19.562  Determination of losses in bond.

    (a) General. (1) Losses (whether by theft, unauthorized voluntary 
destruction, or otherwise) of spirits, denatured spirits, and wines 
shall be determined by the proprietor:
    (i) Each time a tank or bulk conveyance is emptied;
    (ii) On the basis of required physical inventories; and
    (iii) Upon discovery of accidents or unusual variations in gauges.
    (2) When it appears that any container in bond has sustained a loss 
resulting from theft or unauthorized voluntary destruction, such loss 
shall be taxpaid or the container shall be segregated (as necessary) 
with the loss reported promptly to the area supervisor.
    (3) In any instance in which spirits, denatured spirits or wines are 
lost or destroyed in bond, whether by theft, unauthorized voluntary 
destruction, or otherwise, the regional director (compliance) may 
require the proprietor or other person liable for the tax to file a 
claim for relief from the tax in accordance with Sec. 19.41.
    (b) Missing packages. Whenever any packages of spirits, denatured 
spirits, or wine recorded as deposited on bonded premises cannot be 
located or otherwise accounted for, the proprietor shall promptly report 
such fact to the area supervisor, and the proprietor shall either pay 
the tax on the lost spirits, denatured spirits, or wines, or file a 
claim with respect thereto under the provisions of Sec. 19.41.
    (c) Tampering, material deficiency, or loss of proof. When it is 
found that spirits, denatured spirits, or wines in a container have been 
tampered with, or when a material deficiency in the recorded quantity of 
such products is found without evidence of loss by leakage or casualty, 
or when there is a loss of proof of such products not attributable to 
variations in gauging, the proprietor shall segregate the container (as 
necessary) and shall promptly report such fact to the area supervisor, 
unless the proprietor acknowledges liability for the tax on the loss and 
elects to pay the tax on the quantity lost.
    (d) Excessive in-transit losses. Losses of spirits, denatured 
spirits, or wines received in bond in bulk conveyances which exceed one 
percent of the quantity of a product consigned shall be considered as 
excessive in-transit losses. However, in the case of transcontinental 
transfers in bond of wine, only losses in excess of two percent of the 
quantity of wine consigned shall be considered as excessive in-transit 
losses. The proprietor shall promptly report all such excessive in-
transit losses to the area supervisor.
    (e) Storage account loss limitation. When the quantity of spirits 
lost from all the storage tanks and bulk conveyances exceeds 1\1/2\ 
percent of the total quantity contained in the tanks and bulk 
conveyances during the calendar quarter, the loss shall be taxpaid 
unless a claim for remission is filed in accordance with the provisions 
of Sec. 19.41 and is allowed by the regional director (compliance).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1381, as amended 
(26 U.S.C. 5008, 5370))

Sec. 19.563  Loss of spirits from packages.

    (a) Original quantity. Where there is evidence satisfactory to the 
regional director (compliance) that any loss of spirits (including 
denatured spirits) from any package deposited on bonded premises is due 
to theft (except where the regional director (compliance) has made the 
finding provided for in Sec. 19.561(b)) or is due to unauthorized 
voluntary destruction, the regional director (compliance) may require 
the

[[Page 362]]

immediate tax payment of the quantity of spirits so lost, except where 
the extent of any loss from causes other than theft or unauthorized 
voluntary destruction can be established by the proprietor to the 
satisfaction of the regional director (compliance), the regional 
director (compliance) may credit the tax on the loss so established 
against the tax on the original quantity.
    (b) Alternative method. Where there is evidence satisfactory to the 
regional director (compliance) that there has been access, other than as 
authorized by law, to the contents of packages entered for deposit on 
bonded premises, and the extent of such access is such as to evidence a 
lack of due diligence or a failure to employ necessary and effective 
controls on the part of the proprietor, the regional director 
(compliance) may (in lieu of the procedure prescribed in paragraph (a) 
of this section) assess an amount equal to the tax on 5 proof gallons of 
spirits on each of the total number of such packages as determined by 
him.
    (c) Applicability to packages filled after entry. The provisions of 
this section apply to spirits (including denatured spirits) which are 
filled into casks or packages as authorized by law, after entry and 
deposit on bonded premises, whether by recasking, filling from tanks, 
mingling, or otherwise. The quantity filled into those casks or packages 
is considered to be the original quantity for the purpose of this 
section in the case of loss from those casks or packages.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended (26 U.S.C. 5006))

Sec. 19.564  Losses after tax determination.

    (a) Applicability. Pursuant to a claim, the tax on spirits which are 
lost after determination of tax and before completion of physical 
removal from bonded premises, may be abated or remitted or refunded or 
credited without interest to the proprietor of the bonded premises where 
the loss occurred.
    (b) Conditions. (1) Claims for losses under this section shall be 
filed in accordance with subpart C of this part.
    (2) This section shall not apply if the tax would have been 
collectible by reason of 26 U.S.C. 5008(a)(1) if the loss occurred on 
bonded premises before determination of tax.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008))

                                Shortages

Sec. 19.565  Shortages of bottled distilled spirits.

    An unexplained shortage of bottled distilled spirits shall be 
taxpaid: (a) Immediately on a prepayment return on Form 5000.24, or (b) 
on the semimonthly return on Form 5000.24 for the return period during 
which the shortage was ascertained. Unexplained shortages shall be 
determined by comparing the spirits recorded to be on hand with the 
results of the quantitative determination of the spirits found to be on 
hand by actual count during the physical inventory required by 
Sec. 19.402. When the recorded quantity is greater than the quantity 
determined by the physical inventory, the difference is an unexplained 
shortage. The records shall be adjusted to reflect the physical 
inventory.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50 
FR 51388, Dec. 17, 1985]

                     Subpart R--Containers and Marks

                               Containers

Sec. 19.581  Authorized containers.

    (a) General. Proprietors shall use for any purpose of containing, 
storing, transferring, conveying, removing, or withdrawing spirits or 
denatured spirits under this part only containers which are authorized 
by, or under the provisions of this part for such purpose, and a 
container so authorized will be deemed to be an approved container for 
such purpose. Except where stated otherwise, the provisions of part 20 
of this chapter apply to containers used for containing, storing and 
shipping of articles, and the provisions of 27 CFR part 24 apply to 
containers used for storage or transfer of wine. Except for liquor 
bottles, this subpart does not regulate or prohibit the use on plant

[[Page 363]]

premises of any container for purposes other than containing alcoholic 
substances.
    (b) Alternate containers. In addition to the types of containers 
specifically authorized by this part for a particular purpose, a 
container of another type may be authorized for that purpose by the 
Director on a finding by him that the use of such container will afford 
protection to the revenue equal to or greater than that afforded by the 
containers specifically authorized by this part, and that the use will 
not cause administrative difficulty. If another container is so 
authorized by the Director, he shall prescribe the detail and manner in 
which such container shall be constructed, protected, and marked, 
consistent with the provisions of this part and the extent of such use. 
Similarly, where a container authorized for a particular purpose is 
required by this subpart to be made of specified materials, the Director 
may authorize the use of containers made of other materials which he has 
found to be suitable for the intended purpose.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1362, as amended, 
1374, as amended (26 U.S.C. 5206, 5212, 5214, 5301); sec. 805, Pub. L. 
96-39, 93 Stat. 279 (26 U.S.C. 5002); sec. 807, Pub. L. 96-39, 93 Stat. 
285 (26 U.S.C. 5213))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9162, Mar. 6, 1985; T.D. 372, 61 FR 20724, May 8, 1996]

Sec. 19.582  Spirits for nonindustrial use.

    (a) Determination of use. Containers of spirits of a capacity of 1 
gallon (3.875 liters) or less are considered to be for nonindustrial 
use, except for those which contain:
    (1) Anhydrous alcohol; or
    (2) Alcohol which may be withdrawn from bond free of tax.
    (b) Containers. If not inconsistent with the provisions in 27 CFR 
part 5, spirits for nonindustrial use may be filled into:
    (1) Packages, or
    (2) Other containers which are filled during processing operations 
and contain not more than 10 gallons.
    (c) Bottles and labels. The provisions of subpart S of this part 
govern the liquor bottles and labels to be used in bottling spirits for 
nonindustrial domestic use.
    (d) Cases. Spirits for nonindustrial use in containers with a 
capacity of 1 gallon or less shall be placed in cases which afford 
reasonable protection against breakage. Such cases shall not be 
transferred in bond.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1374, as amended 
(26 U.S.C. 5206, 5212, 5301))

Sec. 19.583  Spirits for industrial use.

    (a) Containers. (1) Denatured spirits may be filled into glass or 
metal containers of a capacity not greater than 10 gallons.
    (2) Other spirits for industrial use may be filled into
    (i) Containers of 1 gallon or less; or
    (ii) Glass or metal containers of a capacity of 1 gallon but not 
greater than 10 gallons.
    (b) Encased containers. Unlabeled containers holding from 1 to 10 
gallons of denatured spirits and spirits of 190 degree proof or more for 
industrial use may be encased in wood, fiberboard, or similar material 
if:
    (1) The cases are constructed so that the surface, including the 
opening, of the container is not exposed;
    (2) Required marks are applied to an exterior surface of the case;
    (3) The case is constructed so that the portion containing marks 
will remain attached to the inner container until all the contents have 
been removed; and
    (4) A statement reading ``Do not remove inner container until 
emptied'' or of similar meaning is placed on the portion of the case 
bearing the marks.
    (c) Cases. Except for encased containers, containers for denatured 
spirits and spirits for industrial use of a capacity of 1 gallon or less 
shall be placed in cases which afford reasonable protection against 
breakage.
    (d) Articles. Articles shall be packaged and labeled in accordance 
with the provisions of 27 CFR part 20.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1374, as amended 
(26 U.S.C. 5206, 5301))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9162, Mar. 6, 1985; T.D. ATF-206, 50 FR 23952, June 7, 1985]

[[Page 364]]

Sec. 19.584  Packages.

    Packages may be used on bonded premises for original entry of 
spirits, and for packaging from tanks, storing, transferring in bond, 
and withdrawing from bonded premises of spirits and denatured spirits. 
Packages shall be constructed so as to be capable of secure closure.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

Sec. 19.585  Bulk conveyances.

    Bulk conveyances which conform to the requirements of Sec. 19.588 
may be used on bonded premises for original entry of spirits, and for 
filling from tanks, storing, transferring in bond, and withdrawing 
taxpaid spirits and denatured spirits. Spirits may be withdrawn free of 
tax, pursuant to the provisions of this part, in a bulk conveyance only 
for use of the United States, or if the Director has authorized the 
proprietor, as provided in Sec. 19.581, to so withdraw such spirits to a 
specified consignee. Spirits may be withdrawn without payment of tax, 
pursuant to the provisions of this part, in bulk conveyances for the 
purposes provided in Sec. 19.531 (a), (b), (c), (e), and (f).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

Sec. 19.586  Tanks.

    Tanks which conform to the requirements of Sec. 19.273 may be used 
on bonded premises as containers for distilled spirits, denatured 
spirits, articles, and wines.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

Sec. 19.587  Pipelines.

    Pursuant to the provisions of this part, pipelines which conform to 
the requirements of Sec. 19.274 may be used for (a) the conveyance on 
bonded premises of spirits, denatured spirits, articles, and wines, and 
(b) the conveyance to and from bonded premises of spirits, denatured 
spirits, articles, and wines.

(Sec. 201, Pub. L 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

Sec. 19.588  Construction of bulk conveyances.

    (a) Construction. All bulk conveyances authorized by this part shall 
conform to the following:
    (1) If the conveyance consists of two or more compartments, each 
shall be so constructed or arranged that emptying of any compartment 
will not afford access to the contents of any other compartment.
    (2) The conveyance (or in the case of compartmented conveyances, 
each compartment) shall be so arranged that it can be completely 
drained.
    (3) Each tank car or tank truck shall have permanently and legibly 
marked thereon its number, capacity in wine gallons, and the name or 
symbol of its owner.
    (4) If the conveyance consists of two or more compartments, each 
compartment shall be identified and the capacity of each shall be marked 
thereon.
    (5) A route board, or other suitable device, for carrying required 
marks or brands shall be provided on each bulk conveyance.
    (6) Calibrated charts showing the capacity of each compartment in 
wine gallons for each inch of depth, shall be available for use in 
measuring the contents of each tank truck, tank ship, or barge.
    (b) Proprietor's responsibility. Before filling any bulk conveyance, 
the proprietor shall examine it to ascertain that it meets the 
requirements of this section and is otherwise suitable for receiving the 
spirits, denatured spirits, or wines, and he shall refrain from, or 
discontinue, using any such conveyance found by him or by an ATF officer 
to be unsuitable.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1362, as amended 
(26 U.S.C. 5206, 5212, 5214); sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 
U.S.C. 5213))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23952, June 7, 1985]

Sec. 19.589  Restrictions on disposition of bulk spirits.

    (a) For nonindustrial use. Spirits for nonindustrial use may be sold 
or disposed of in containers holding more than 1 wine gallon only to the 
persons

[[Page 365]]

and for the purposes set forth in 27 CFR part 3.
    (b) For industrial use. Shipment or delivery of spirits (other than 
alcohol or neutral spirits) withdrawn from bond in containers holding 
more than 1 wine gallon for industrial use shall, as provided in 27 CFR 
part 3, be made directly to the user of the spirits.

(Sec. 201, Pub. L. 85-895, 72 Stat. 1356, as amended (26 U.S.C. 5201))

                                  Marks

Sec. 19.592  General.

    Proprietors shall mark, identify, and label all containers of 
spirits or denatured spirits as provided by this part. Containers of 
wine shall be marked in accordance with 27 CFR part 24. Containers of 
articles shall be marked in accordance with 27 CFR part 211.

(Sec. 201 Pub. L. 85-859, 72 Stat. 1358, as amended, 1360, as amended 
(26 U.S.C. 5204, 5206))

[T.D. ATF-206, 50 FR 23952, June 7, 1985, as amended by T.D. 372, 61 FR 
20724, May 8, 1996]

Sec. 19.593  Package identification numbers in production and storage.

    (a) General. Packages of spirits filled during production or storage 
operations after December 31, 1979, shall be marked with a lot 
identification representing the date the package is filled, and 
consisting, in the order shown, as follows:
    (1) The last two digits of the calendar year;
    (2) An alphabetical designation from ``A'' through ``L'', 
representing January through December, in that order;
    (3) The digits corresponding to the day of the month; and
    (4) When more than one lot is filled into packages during the same 
day, for successive lots after the first lot, a letter suffix, in 
alphabetical order, with ``A'' representing the second lot, ``B'' 
representing the third lot, and so forth.

The first three lots filled into packages on January 2, 1980, would be 
identified as ``80A02'', ``80A02A'', ``80A02B''.
    (b) Packages constituting a lot. Packages of spirits received from 
customs custody or filled during any one day shall be given the same lot 
identification subject to the following conditions:
    (1) They are of the same type and either are of the same rated 
capacity or are uniformly filled with the same quantity by weight or 
other method provided in Sec. 19.319;
    (2) They are filled with spirits of the same kind and same proof;
    (3) They are filled with spirits which are mingled in accordance 
with Sec. 19.346; and
    (4) They are filled with imported spirits, Puerto Rican spirits, or 
Virgin Islands spirits, as applicable. Any remnant package shall itself 
constitute a lot.
    (c) Serial numbers. The regional director (compliance) may require 
serial numbers on packages of spirits within the same lot in conjunction 
with the lot identification, at the time of filling, receipt on bonded 
premises, or withdrawal from bond. Proprietors shall assign temporary 
serial numbers to packages for control purposes when they are 
transferred in bond in an unsecured conveyance or gauged after being 
tampered within the storage account.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]

Sec. 19.594  Numbering of packages and cases in processing.

    (a) General. Packages of spirits and denatured spirits filled during 
processing operations and cases containing bottles or other containers 
of spirits and denatured spirits shall, when filled, be consecutively 
numbered in a separate series by the proprietor commencing with ``1'' in 
each series of serial numbers, except that any series of such numbers in 
use may be continued. When the numbering in any series reaches 
``1,000,000'', the proprietor may recommence the series. However, a new 
series for packages of spirits and denatured spirits filled during 
processing operations shall be given an alphabetical prefix or suffix. 
For additional identification, separate series of serial numbers, 
distinguished from each other by the use of alphabetical prefixes or 
suffixes, may be established to

[[Page 366]]

identify size of bottles, brand names, or other information, on written 
notice to the regional director (compliance). Remnant cases shall be 
given the serial number of the last full case followed by the letter R. 
Where there is a change in the individual, firm, corporate name, or 
trade name, all series in use at that time shall be continued. However, 
for a change in proprietorship, a new series shall be commenced.
    (b) Alternative method for spirits, including denatured spirits, for 
industrial use. Instead of the numbering required by paragraph (a) of 
this section, packages and cases of spirits, including denatured 
spirits, for industrial use filled in processing may be marked with lot 
identification numbers provided in Sec. 19.593.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

Sec. 19.595  Specifications for marks.

    (a) Manner. (1) The proprietor shall place the prescribed marks on 
cases, encased containers, and packages of spirits and denatured spirits 
so that they are:
    (i) Of sufficient size to be easily read;
    (ii) Of a color distinctly in contrast to that of the background;
    (iii) Legible; and
    (iv) Durable.
    (2) Cases, encased containers or packages may be marked by the use 
of labels which are legible and securely affixed.
    (b) Location. The required marks shall be placed on one side or 
head, as applicable.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

Sec. 19.596  Marks on packages of spirits filled on bonded premises.

    (a) Packages filled in production or storage. Except as otherwise 
provided in this part, packages of spirits filled in production or 
storage shall be marked with:
    (1) The name of the producer, or his trade name as required by 
paragraph (c) of this section;
    (2) The plant number of the producer, such as ``DSP-KY-708'';
    (3) The kind of spirits or, in the case of distillates removed under 
Sec. 19.322, the kind of distillates such as ``Grape distillate'', 
``Peach distillate'', etc.;
    (4) The package identification number;
    (5) ``BSA'' or ``OC'' when spirits are treated with caramel or oak 
chips, as the case may be;
    (6) The rated capacity of the package in gallons shown as ``RC--G''.
    (7) If packages of spirits of 190 degrees or more of proof are 
filled by other than the producer, the name (or trade name) and plant 
number of the packaging proprietor shall be substituted for that of the 
producer.
    (b) Packages filled in processing. Except as otherwise provided in 
this part, packages of spirits filled in processing shall be marked 
with:
    (1) The name of the processor, or his trade name;
    (2) The plant number of the processor, such as ``DSP-KY-708'';
    (3) The kind of spirits (in the case of an intermediate, the product 
name shown on Form 5110.38);
    (4) The serial number or lot identification number, as applicable, 
and date of filling;
    (5) Proof of spirits; and
    (6) If manufactured under an approved formula, the serial number of 
the formula.
    (c) Real or trade names. The producer's real name or any trade name 
authorized (as provided in Sec. 19.165), at the time of production, may 
be placed on any package filled at the time of production gauge, or at 
the time of original packaging of the spirits in wood when, as provided 
in Sec. 19.320, the spirits were not filled into wooden packages at the 
time of production gauge. When spirits have been mingled under 
Sec. 19.346, the proprietor may use any of the names represented in the 
mingled spirits, but no other name, as the name of the producer to be 
marked on packages filled with such mingled spirits. However, if the 
proprietor was the actual producer of the spirits, he may in any case 
use his real name. The processor's real name or any trade name 
authorized (as provided in Sec. 19.165) may be placed on any package 
filled with spirits during processing operations.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

[[Page 367]]

Sec. 19.597  Kind of spirits.

    (a) Designation. The designations as to kind of spirits required by 
Sec. 19.596 shall be in accordance with the classes and types of spirits 
set out in 27 CFR part 5, except that:
    (1) Spirits distilled at more than 160 degrees of proof, which lack 
the taste, aroma, and other characteristics generally attributed to 
whisky, brandy, rum, or gin, and which are substantially neutral in 
character, may be designated as ``Alcohol''. When alcohol is withdrawn 
on determination of tax, the designation shall consist of the word 
``Alcohol'' preceded or followed by a word or phrase descriptive of the 
material from which the alcohol was produced.
    (2) The designations for vodka, neutral spirits, or gin shall 
include a word or phrase descriptive of the material from which the 
spirits so designated were produced.
    (3) Spirits distilled at less than 190 degrees of proof which lack 
the taste, aroma, and other characteristics generally attributed to 
whisky, brandy, rum, or gin, may be designated ``Spirits'', preceded or 
followed by a word or phrase descriptive of the material from which 
produced. However, spirits distilled on or after July 1, 1972, as 
provided in this paragraph may not be designated ``Spirits grain'' or 
``Grain spirits''.
    (4) Spirits distilled from fruit at or above 190 degrees of proof, 
if intended for use in wine production, shall be designated ``Neutral 
Spirits--Fruit'', preceded or followed by the name of the fruit from 
which produced.
    (5) Spirits distilled at not more than 160 degrees of proof from a 
fermented mash of not less than 51 percent rye, corn, wheat, malted 
barley, or malted rye grain, packaged in reused cooperage, may be 
designated ``Whisky'' if further qualified with the words ``Distilled 
from rye mash'' (or bourbon, wheat, malt, or rye malt mash, as the case 
may be). However, such spirits shall, if distilled from a fermented mash 
of not less than 80 percent corn, be designated ``Corn Whisky.''
    (b) Change of designation. A proprietor may, on written application 
to, and approval of the regional director (compliance), change the 
original designation for spirits at any time, before their withdrawal 
from bonded premises, to a new designation properly describing the 
spirits in accordance with the provisions of this section.
    (c) Other designations. If the proprietor proposes to produce 
spirits for which a designation has not been prescribed, he shall first 
make written application to the Director for a designation for such 
spirits and such spirits shall be branded accordingly.
    (d) Spirits for nonindustrial use. The provisions of this section 
shall not be construed as authority for applying designations to spirits 
withdrawn for nonindustrial use which designations do not comply with 
provisions of 27 CFR part 5.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

Sec. 19.598  [Reserved]

Sec. 19.599  Change of packages in storage.

    When spirits are transferred from one package to another as 
authorized in Sec. 19.345, each new package shall be given the same 
package identification number and marks as the original package. The 
proprietor shall prepare and sign a label to be affixed to the head of 
each new package in the manner prescribed for affixing distilled spirits 
stamps. The label shall be in the following form:

    The spirits in this ____________________, (kind of 
cooperage)____________________, (Barrel or drum) package identification 
No.____________________, were transferred from a__________________, 
____________________, (kind of cooperage)____________________, (Barrel 
or drum) on____________________, (Date),

_______________________________________________________________________

                              (Proprietor)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

Sec. 19.600  [Reserved]

Sec. 19.601  Marks on containers of specially denatured spirits.

    (a) General. Each package, case, and encased container of specially 
denatured spirits filled on bonded premises shall be marked or labeled 
to show:
    (1) Quantity in gallons;

[[Page 368]]

    (2) Serial number or lot identification number;
    (3) Plant number of the proprietor;
    (4) Designation or abbreviation of the specially denatured spirits 
by kind (alcohol or rum);
    (5) Formula number; and
    (6) Proof of spirits which were denatured at other than 190 degrees 
of proof.
    (b) Bottles. Each bottle shall be marked or labeled to show the 
information prescribed in paragraph (a) (1), (3), (4), (5), and (6) of 
this section.
    (c) Alternate formulations. When spirits are denatured under a 
formula authorizing a choice of types and quantities of denaturants, the 
container or case shall be marked to show actual types and quantities of 
denaturants used.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

Sec. 19.602  Marks on containers of completely denatured alcohol.

    Each container of completely denatured alcohol, except pipelines and 
bulk conveyances, shall have marked on the head of the package, or side 
of the can or carton, the name of the proprietor by whom the containers 
were filled, the plant number where filled, the contents in wine 
gallons, the apparent proof, the words ``Completely Denatured Alcohol'', 
and the formula number.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended) (26 U.S.C. 5206))

Sec. 19.603  [Reserved]

Sec. 19.604  Caution label.

    Each container of completely denatured alcohol containing five 
gallons or less, sold or offered for sale, shall be labeled to show, in 
plain, legible letters, the words ``Completely Denatured Alcohol'' and 
the following statement ``Caution--contains poisonous ingredients.'' The 
name and address of the denaturer may be printed on such label, but no 
other extraneous matter will be permitted thereon without the approval 
of the Director. The word ``pure'', qualifying denatured alcohol, will 
not be permitted to appear on the label or the container.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9162, Mar. 6, 1985]

Sec. 19.605  Additional marks on portable containers.

    (a) In addition to the other marks required by this part, portable 
containers (other than bottles enclosed in cases) of spirits or 
denatured spirits to be withdrawn from the bonded premises:
    (1) Without payment of tax, for export, transfer to customs 
manufacturing bonded warehouses, transfer to foreign-trade zones or 
supplies for certain vessels and aircraft, shall be marked as provided 
in 27 CFR part 252; or
    (2) Tax-free alcohol shall be marked with the word ``Tax-Free.''
    (b) The proprietor may show other information such as brand or trade 
name; caution notices and other material required by Federal, State, or 
local law or regulations; wine or proof gallons; and plant control data. 
However, marks or attachments shall not conceal, obscure, interfere with 
or conflict with the markings required by this subpart.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

Sec. 19.606  Marks on bulk conveyances.

    (a) The proprietor shall securely attach to the route board, or 
other suitable device, of each bulk conveyance used to transport spirits 
or denatured spirits, a label to identify each conveyance or compartment 
as follows:
    (1) Name, plant number, and location of the consignor;
    (2) Name, plant number, permit number, or registry number (as 
applicable), and location of the consignee;
    (3) Date of shipment;
    (4) Quantity (proof gallons for spirits, wine gallons for denatured 
spirits); and
    (5) Formula number for denatured spirits.
    (b) The provisions of paragraph (a) of this section shall not apply 
when the conveyance is accompanied by documentation which contains the 
information required by paragraph (a) of this section.

[[Page 369]]

    (c) In addition, export shipments shall conform to the requirements 
of 27 CFR part 252.
    (d) Bulk conveyances used to transport articles or wine shall 
conform to the requirements of part 20 or 240 of this chapter, as 
applicable.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9162, Mar. 6, 1985]

Sec. 19.607  Marks on cases.

    (a) Mandatory marks. Except for cases marked as provided in 
Sec. 19.608, the following information shall be plainly marked on each 
case of spirits filled in processing:
    (1) Serial number;
    (2) Kind of spirits;
    (3) Plant number where bottled;
    (4) Date filled;
    (5) Proof; and
    (6) Liters or proof gallons.

Cases removed for export, transfer to customs bonded warehouses or 
customs manufacturing bonded warehouses, transfer to foreign-trade 
zones, or for use as supplies on certain vessels and aircraft, shall 
bear the additional marks required by 27 CFR part 252.
    (b) Other marks. In addition to the required marks on cases filled 
in processing, the proprietor may include other marks such as;
    (1) Name or trade name, and location of desired, of the bottler, and 
in conjunction therewith the word ``Bottler'';
    (2) For products actually distilled or processed by the proprietor, 
his name or trade name, and location, if desired, and in conjunction 
therewith the words ``Distiller'' or ``Processor'' as applicable;
    (3) For products actually imported and bottled by the proprietor, 
the words ``Imported and Bottled By'', followed by his name or trade 
name, and location if desired;
    (4) For products bottled for a dealer, the words ``Bottled For'', 
followed by the name of such dealer;
    (5) Other material required by Federal or State law and regulations; 
or
    (6) Labels or data describing the contents for commercial 
identification or accounting purposes, or indicating payment of State or 
local taxes.


The marks authorized by this paragraph shall not interfere with or 
detract from the mandatory marks prescribed in paragraph (a) of this 
section.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206); 
sec. 3(a), Pub. L. 91-659, 84 Stat. 1965, as amended (26 U.S.C. 5066))

Sec. 19.608  Cases of industrial alcohol.

    (a) Mandatory marks. Each case, including encased containers, of 
alcohol bottled for industrial use in accordance with subpart M of this 
part shall be marked as applicable, to show--
    (1) ``Alcohol'';
    (2) Serial number or lot identification number;
    (3) Plant number;
    (4) Proof;
    (5) Proof gallons;
    (6) ``Tax-Free''; and
    (7) Information required by 27 CFR part 252, for cases withdrawn for 
export, transferred to customs bonded warehouses, transferred to 
foreign-trade zones, or supplies for certain vessels and aircraft.
    (b) Other marks. Cases may be marked with other marks which do not 
interfere with or detract from mandatory case marks in the manner 
permitted by Sec. 19.607.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1369, as amended 
(26 U.S.C. 5206, 5235))

Sec. 19.609  [Reserved]

Sec. 19.610  Obliteration of marks.

    Except as provided in Sec. 19.597(b), the marks required by this 
part to be placed on any container or case shall not be destroyed or 
altered before the container or case is emptied.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5206))

[T.D. ATF-206, 50 FR 23952, June 7, 1985]

Sec. 19.611  Relabeling and reclosing off bonded premises.

    The proprietor of a distilled spirits plant may relabel, affix brand 
labels, or reclose bottled taxpaid spirits on wholesale liquor dealer 
premises or at a taxpaid storeroom on, contiguous to,

[[Page 370]]

adjacent to, or in the immediate vicinity of the plant, if such 
wholesale liquor dealer premises or taxpaid storeroom is operated in 
connection with the plant. If products which are relabeled under this 
section were originally bottled by another proprietor, the relabeling 
proprietor shall have on file a statement from the original bottler 
consenting to the relabeling.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-206, 50 FR 23952, June 7, 1985]

Sec. 19.612  Authorized abbreviations to identify marks.

    In addition to the abbreviations and symbols which are authorized in 
this part for use in marking containers, the following abbreviations may 
be used to identify certain marks:

------------------------------------------------------------------------
                    Mark                             Abbreviation
------------------------------------------------------------------------
Completely Denatured Alcohol...............  CDA
Distilled Spirits Stamps...................  DSS
Gallon or Wine Gallon......................  WG
Gross Weight...............................  G
Proof......................................  P
Specially Denatured:
    Alcohol................................  SDA
    Rum....................................  SDR
Tare.......................................  T
Tax Determined.............................  TD
Wine Spirits Addition......................  WSA
------------------------------------------------------------------------

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]

             Subpart S--Liquor Bottle and Label Requirements

Sec. 19.631  Scope of subpart.

    The provisions of Secs. 19.632 through 19.639 of this subpart shall 
apply only to liquor bottles having a capacity of 200 ml or more except 
where expressly applied to liquor bottles of less than 200 ml capacity. 
The provisions of Secs. 19.641 through 19.650 of this subpart shall 
apply to all liquor bottles, regardless of size.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1374, as amended 
(26 U.S.C. 5206, 5301))

                       Liquor Bottle Requirements

Sec. 19.632  Bottles authorized.

    Liquor bottles for domestic use shall conform to the applicable 
standards of fill provided in subpart E of 27 CFR part 5, including 
those for liquor bottles of less than 200 ml capacity. The use of any 
bottle size other than as authorized in subpart E of 27 CFR part 5 is 
prohibited for the bottling of nonindustrial distilled spirits for 
domestic purposes.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

Sec. 19.633  Distinctive liquor bottles.

    (a) Application. A proprietor desiring approval of domestic liquor 
bottles of distinctive shape or design, including bottles of less than 
200 ml capacity, or, to use such distinctive liquor bottles, shall 
submit ATF Form 5100.31 to the Director for approval. The applicant 
shall certify as to the total capacity of a representative sample bottle 
before closure (expressed in milliliters) on each copy of the form. In 
addition, the applicant shall affix a readily legible photograph (both 
front and back of the bottle) to the front of each copy of ATF Form 
5100.31, along with the label(s) to be used on the bottle. The applicant 
shall not submit an actual bottle or an authentic model unless 
specifically requested to do so.
    (b) Approval. Properly submitted ATF Forms 5100.31 for approval of 
distinctive liquor bottles shall be approved by the Director if the 
bottles are found to--
    (1) Meet the requirements of 27 CFR part 5;
    (2) Be distinctive;
    (3) Be suitable for their intended purpose;
    (4) Not jeopardize the revenue; and
    (5) Not be deceptive to the consumer.

The applicant shall keep a copy of the approved ATF Form 5100.31, 
including an approved photograph (both front and back) of the 
distinctive liquor bottle, on file at his premises. If ATF Form 5100.31 
is disapproved, the applicant shall be notified of the Director's 
decision and the reasons therefor.
    (c) Cross reference. For procedures regarding issuance, denial and 
revocation

[[Page 371]]

of distinctive liquor bottle approvals, as well as appeal procedures, 
see part 13 of this chapter.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-242, 51 
FR 39525, Oct. 29, 1986; T.D. ATF-406, 64 FR 2134, Jan. 13, 1999]

Sec. 19.634  Receipt and storage of liquor bottles.

    No proprietor shall accept shipment or delivery of liquor bottles 
except from the manufacturer thereof, a supplier abroad, or another 
proprietor. However, the regional director (compliance) may, pursuant to 
letterhead application, authorize a proprietor to receive and reuse 
liquor bottles assembled for such proprietor as provided in 27 CFR 
194.263. Liquor bottles, including those of less than 200 ml capacity, 
shall be stored in a safe and secure place, either on the proprietor's 
qualified premises or at another location.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

Sec. 19.635  Bottles to be used for display purposes.

    Liquor bottles may be furnished to liquor dealers for display 
purposes, provided that each bottle is marked to show that it is to be 
used for such purpose. The disposition of such bottles, showing names 
and addresses of consignees, dates of shipment, and size, quantity, and 
description of bottles, shall be included in the records required under 
Sec. 19.747.

(Approved by the Office of Management and Budget under control number 
1512-0198)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

[T.D. ATF-206, 50 FR 23952, June 7, 1985]

Sec. 19.636  Bottles for testing purposes.

    Proprietors may ship liquor bottles to persons for testing. The 
disposition of such bottles, showing the name and address of the person 
to whom the bottles are shipped, date of shipment, and the size and 
number of bottles shipped, shall be included in the records required 
under Sec. 19.747.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

Sec. 19.637  Bottles not consitituting approved containers.

    The Director shall disapprove for use as a liquor bottle any bottle, 
including a bottle of less than 200 ml capacity, which he determines to 
be deceptive. Any such bottle is not an approved container for the 
purposes of Sec. 19.581 of this part, and shall not be used for 
packaging distilled spirits for domestic purposes.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

Sec. 19.638  Disposition of stocks of liquor bottles.

    When a proprietor discontinues operations, or permanently 
discontinues the use of a particular size or type of liquor bottle, the 
stocks of such bottles on hand shall either be disposed of to another 
person authorized to receive liquor bottles, or destroyed, including 
disposition for purposes which will render them unusable as bottles. 
However, on approval of a written application by the regional director 
(compliance) of the region in which the proprietor's plant is located, 
liquor bottles may be otherwise disposed of.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

Sec. 19.639  Use and resale of liquor bottles.

    No proprietor shall use any liquor bottle except for packaging 
distilled spirits, or dispose of any empty liquor bottle except to 
another person authorized to receive liquor bottles or as provided in 
Sec. 19.638. Bottles may be furnished to others for display and testing 
purposes as provided in Secs. 19.635 and 19.636, respectively.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

                        Bottle Label Requirements

Sec. 19.641  Certificate of label approval or exemption.

    (a) Requirement. Proprietors are required by 27 CFR part 5 to obtain 
approval of labels, or exemption from label approval, for any label to 
be used on bottles of spirits for domestic use

[[Page 372]]

and shall exhibit evidence of label approval, or of exemption from label 
approval, on request of an ATF officer.
    (b) Cross reference. For procedures regarding the issuance, denial 
and revocation of certificates of label approval and certificates of 
exemption from label approval, as well as appeal procedures, see Part 13 
of this chapter.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-406, 64 FR 2134, Jan. 13, 1999]

Sec. 19.642  Statements required on labels under an exemption from label 
          approval.

    All labels to be used on bottles of spirits for domestic use under 
an exemption from label approval shall contain the applicable 
information required in Secs. 19.643 through 19.650. Where a statement 
of age or age and percentage is required, it shall have the meaning 
given, and be stated in the manner provided in 27 CFR part 5.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.643  Brand name, kind, alcohol content, and State of 
          distillation.

    (a) Brand name and kind. The label of distilled spirits shall state 
the brand name and kind, as set out in 27 CFR part 5.
    (b) Alcohol content--(1) Mandatory statement. The label of distilled 
spirits shall state the alcohol content in percent-alcohol-by-volume. 
Products such as ``Rock and Rye'' or similar products containing a 
significant amount of solid material shall state the alcohol content at 
the time of bottling as follows: ``Bottled at ______ percent-alcohol-by-
volume.''
    (2) Optional statement. In addition, the label may also state the 
alcohol content in degrees of proof if this information appears in 
direct conjunction (i.e. with no intervening material) with the 
statement expressed in percent-alcohol-by-volume. If both forms of 
alcohol content are shown, the optional statement in degrees of proof 
shall be placed in parentheses, in brackets, or otherwise distinguished 
from the mandatory statement in percent-alcohol-by-volume to emphasize 
the fact that both expressions of alcohol content mean the same thing.
    (c) State of distillation--(1) Mandatory statement. If a whisky 
produced in the United States was not produced in the State shown on the 
label, the label shall show the State of distillation, except as 
provided by paragraph (c)(2) or (c)(3) of this section. The Director 
may, however, require the State of distillation to be shown on the label 
or permit such other. labeling as may be necessary to preclude any 
misleading or deceptive impression which might otherwise be created as 
to the actual State of distillation.
    (2) Exceptions. The State of distillation is not required to be 
shown on labels of ``blended whisky'', ``a blend of straight whiskies'', 
``spirit whisky'', ``light whisky'', or ``blended light whisky''. The 
State of distillation may be prohibited on certain labels of ``light 
whisky'' or ``blended light whisky'', in accordance with paragraph 
(c)(3) of this section.
    (3) Prohibited statement. The State of distillation may not be 
shown, except as part of the name and address required by 27 CFR 
5.36(a), on labels of ``light whisky'' or ``blended light whisky'' 
produced in a State which the Director finds to be associated by 
consumers with an American type whisky.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201)

Sec. 19.644  Net contents.

    The net contents of liquor bottles shall be shown on the label, 
unless the statement of the net contents is permanently marked on the 
side, front, or back of the bottle.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as ameded (26 U.S.C. 5201))

Sec. 19.645  Name and address of bottler.

    There shall be stated on the label of distilled spirits the phrase 
``Bottled by'', ``packed by'', or ``Filled by'' immediately followed by 
the name (or trade name) of the bottler and the place where such spirits 
are bottled. If the bottler is the actual bona fide operator of more 
than one distilled spirits plant engaged in bottling operations, there 
may, in addition, be stated immediately following the name (or trade

[[Page 373]]

name) of such bottler the addresses of such other plants. However:
    (a) Where distilled spirits are bottled by or for the distiller 
thereof, there may be stated, in lieu of the phrase ``Bottled by'', 
``Packed by'', or ``Filled by'', followed by the bottler's name (or 
trade name) and address, the phrase ``Distilled by'', followed by the 
name (or trade name) under which the particular spirits were distilled, 
or any trade name shown on the distiller's permit (covering the premises 
where the particular spirits were distilled), and the address (or 
addresses) of the distiller;
    (b) Where ``straight whiskies'' of the same type which have been 
produced in the same State by two or more different distillers are 
combined (either at time of bottling or at a warehouseman's bonded 
premises for further storage) and subsequently bottled and labeled as 
``straight whisky,'' such ``straight whisky'' shall be labeled in 
accordance with the requirements of the first paragraph of this section. 
Where such ``straight whisky'' is bottled by or for the distillers 
thereof, there may be stated on the label, in lieu of the requirements 
of the first paragraph of this section, the phrase ``distilled by,'' 
followed by the names (or trade names) of the different distillers who 
distilled a portion of the ``straight whisky,'' the addresses of the 
distilleries where the ``straight whisky'' was distilled, and the 
percentage of ``straight whisky'' distilled by each distiller (with a 
tolerance of plus or minus 2 percent). In the case where ``straight 
whisky'' is made up of a mixture of ``straight whiskies'' of the same 
type from two or more different distilleries of the same proprietor 
located within the same State, and where the ``straight whisky'' is 
bottled by or for the proprietor thereof, such ``straight whisky'' may 
be labeled, in lieu of the requirements of the first paragraph of this 
section, with the phrase ``distilled by'' followed by the name (or trade 
name) of the proprietor and the addresses of the different distilleries 
which distilled a portion of the ``straight whisky.''
    (c) Where distilled spirits are bottled by or for the proprietor of 
a distilled spirits plant, there may be stated, in lieu of the phrase 
``Bottled by'', ``Packed by'', or ``Filled by'', followed by the 
bottler's name (or trade name) and address, the phrase ``Blended by'', 
``Made by'', ``Prepared by'', ``Manufactured by'', or ``Produced by'' 
(whichever may be appropriate to the process involved), followed by the 
name (or trade name) and the address (or addresses) of the distilled 
spirits plant proprietor;
    (d) On labels of distilled spirits bottled for a retailer or other 
person who is not the actual distilled spirits plant proprietor of such 
distilled spirits, there may also be stated the name and address of such 
retailer or other person, immediately preceded by the words ``Bottled 
for'', or ``Distributed by'', or other similar statement; and
    (e) The label may state the address of the proprietor's principal 
place of business in lieu of the place where the bottling, distilling or 
processing operation occurred, if the address where the operation 
occurred is indicated by printing, coding, or other markings, on the 
label or on the bottle. The coding system employed will permit an ATF 
officer to determine where the operation stated on the label occurred. 
Prior to using a coding system, the distilled spirits plant proprietor 
shall send a notice explaining the coding system to the regional 
director (compliance) of each region where a label code is used.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D.ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D.ATF-259, 52 FR 
41423, Oct. 28, 1987; T.D. ATF-260, 52 FR 42101, Nov. 3, 1987]

Sec. 19.646  Age of whisky containing no neutral spirits.

    In the case of whisky containing no neutral spirits, statements of 
age and percentage shall be stated on the label as provided in 27 CFR 
part 5.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.647  Age of whisky containing neutral spirits.

    In the case of whisky containing neutral spirits, the age of the 
whisky or whiskies and the respective percentage by volume of whisky or 
whiskies and

[[Page 374]]

neutral spirits, shall be stated on the label as provided in part 5 of 
this chapter.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.648  Age of brandy.

    If brandy is aged for a period of less than two years, the age 
thereof shall be shown on the label.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.649  Presence of neutral spirits and coloring, flavoring, and 
          blending materials.

    The presence of neutral spirits or coloring, flavoring, or blending 
materials shall be stated on labels in the manner provided in 27 CFR 
part 5.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.650  Country of origin.

    On labels of imported distilled spirits there shall be stated the 
country of origin in substantially the following form: ``Product of 
________________,'' the blank to be filled in with the name of the 
country or origin.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

                           Subpart T--Closures

    Source: T.D. ATF-206, 50 FR 23952, June 7, 1985.

Sec. 19.661  General.

    Each bottle or other container of spirits having a capacity of one 
gallon (3.785 liters) or less shall bear a closure or other device 
affixed in accordance with Sec. 19.662. The closure or other device 
shall be affixed to the container prior to withdrawal from bond or 
customs custody.

(Approved by the Office of Management and Budget under control number 
1512-0461)
(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))

Sec. 19.662  Affixing closures.

    Closures or other devices on containers having a capacity of one 
gallon (3.785 liters) or less shall be securely affixed to the 
containers so as to leave a portion remaining on the container when the 
container is opened. In addition, the closures or other devices shall be 
constructed in such a manner as to require that they be broken to gain 
access to the contents of the containers.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))

Sec. 19.663  Reclosing.

    Bottles of distilled spirits filled on bonded premises may be 
reclosed under the provisions of subpart M of this part. Bottles of 
distilled spirits to which closures or other devices have been affixed 
may also be reclosed under the provisions of Sec. 19.611.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5215))

     Subpart U--Return of Spirits to Bonded Premises and Voluntary 
                               Destruction

                                 Returns

Sec. 19.681  Return of taxpaid spirits to bonded premises.

    (a) General. This section and Sec. 19.682 pertain only to taxpaid 
spirits returned to bonded premises under 26 U.S.C. 5215(a). The return 
of taxpaid bottled spirits to bonded premises solely for relabeling or 
reclosing is covered in Sec. 19.393.
    (b) Return. Distilled spirits on which the tax has been paid or 
determined may only be returned to the bonded premises of a distilled 
spirits plant under this section for:
    (1) Destruction, in accordance with Sec. 19.691;
    (2) Denaturation, in accordance with subpart N;
    (3) Redistillation, in accordance with subpart K;
    (4) Reconditioning; or
    (5) Rebottling.
    (c) Claims. Claims for credit or refund of tax on spirits returned 
to bonded premises shall be filed as provided in, and accompanied by the 
information prescribed by, Sec. 19.42.
    (d) Applicability of 26 U.S.C. Chapter 51. All provisions of 26 
U.S.C. Chapter 51 and this part, applicable to spirits in ATF bond, 
shall be applicable to spirits when returned to bonded premises

[[Page 375]]

under this section. The provisions of this subpart do not apply to 
taxpaid bottled spirits returned to bond solely for relabeling or 
reclosing and under the provisions of subpart M of this part.

(Sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23952, June 7, 1985]

Sec. 19.682  Receipt and gauge of returned taxpaid spirits.

    (a) Dump. Unless returned in the sealed metal drums in which they 
were withdrawn, spirits returned to bonded premises shall be immediately 
dumped.
    (b) Gauge. Spirits returned under Sec. 19.681 shall be gauged upon 
receipt on bonded premises. Such gauge may be established on the basis 
of case markings and label information, as provided in Sec. 19.91.
    (c) Supporting documents. (1) Proprietors must have on file at the 
plant where spirits are returned to bond such documentation as is 
necessary to establish the amount of tax for which a claim for credit or 
refund may be allowed. Proprietors shall maintain credit memoranda or 
comparable financial records evidencing the return of each lot of 
spirits.
    (2) If the spirits contain eligible wine or eligible flavors, the 
proprietor shall also have on file a copy of the record of tax 
determination prescribed by Sec. 19.761, or other documentation which 
establishes the amount of tax for which a claim for credit or refund may 
be allowed. In lieu of establishing the actual effective tax rate of a 
product, the proprietor may claim refund or credit based on the lowest 
effective tax rate applied to the product.

(Sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215); Sec. 807, Pub. 
L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201, Pub. L. 85-859, 72 
Stat. 1356, as amended (26 U.S.C. 5201); Sec. 6, Pub. L. 96-598, 94 
Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-297, 55 
FR 18064, Apr. 30, 1990]

Sec. 19.683  Return of recovered denatured spirits and recovered 
          articles.

    Recovered denatured spirits and recovered articles may be returned 
for restoration or redenaturation to the bonded premises of any plant 
authorized to denature spirits, in accordance with the provisions of 27 
CFR part 20. If restoration requires redistillation, the recovered 
denatured spirits or recovered articles may be returned for that purpose 
to bonded premises of a plant authorized to produce or process spirits. 
Recovered denatured spirits or recovered articles shall be gauged on 
receipt.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1363, as amended, 1372, as amended 
(26 U.S.C. 5223, 5273))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9162, Mar. 6, 1985]

Sec. 19.684  Articles and spirits residues received for redistillation.

    Articles manufactured under 27 CFR part 20, and spirits residues of 
manufacturing processes related thereto, may be received on the bonded 
premises of a distilled spirits plant authorized to produce or process 
distilled spirits, for the recovery by redistillation of the distilled 
spirits contained in those materials. The proprietor shall gauge the 
materials when received.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended (26 U.S.C. 5223))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9162, Mar. 6, 1985]

Sec. 19.685  Return of recovered tax-free spirits, and spirits and 
          denatured spirits withdrawn free of tax.

    (a) General. Specially denatured spirits withdrawn free of tax under 
the applicable provisions of 27 CFR part 252 for exportation or for 
deposit in a foreign-trade zone, and spirits or denatured spirits 
withdrawn free of tax under the applicable provisions of 27 CFR part 20 
or 22, may be returned: (1) To bonded premises of any distilled spirits 
plant authorized to produce or process distilled spirits, for 
redistillation; or (2) To any bonded premises of a distilled spirits 
plant pending subsequent lawful withdrawal free of tax.

[[Page 376]]

Recovered tax-free spirits may, as provided in 27 CFR part 22, be 
returned for redistillation to bonded premises of any distilled spirits 
plant authorized to produce or process distilled spirits or to any 
bonded premises of a distilled spirits plant for restoration (not 
including redistillation). The return shall be made under the applicable 
provisions of this part and 27 CFR part 20, 22, or 252, as appropriate.
    (b) Bonding requirements. Before spirits or denatured spirits are 
returned to bonded premises, except spirits or denatured spirits 
returned for redistillation, the proprietor shall file a consent of 
surety on Form 1533 to extend the terms of the operations or unit bond 
to cover the return of the spirits. The proprietor may file one consent 
of surety on the bond to extend the terms thereof to cover all spirits 
which may be returned.
    (c) Procedure. When recovered tax-free spirits, spirits, or 
denatured spirits are received, they shall be gauged. When containers of 
spirits removed for export are returned to bond, pending subsequent 
removal for a purpose other than export, the export marks shall be 
obliterated.

(Sec. 3, Act of June 13, 1934, 48 Stat. 999, as amended (19 U.S.C. 81c); 
sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1365, as amended 
(26 U.S.C. 5001, 5223))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9162, Mar. 6, 1985]

Sec. 19.686  Return of spirits withdrawn without payment of tax.

    (a) Spirits withdrawn for export. Spirits lawfully withdrawn without 
payment of tax under the provisions of 27 CFR part 252 for exportation, 
or for transfer to a customs bonded warehouse or a customs manufacturing 
bonded warehouse, or for deposit in a foreign-trade zone, or for use on 
vessels and aircraft, and not so exported, transferred, deposited, or 
used (or laden for use) on a vessel or aircraft, may be returned, under 
the applicable provisions of this part and 27 CFR part 252: (1) To the 
bonded premises of any plant authorized to produce or process distilled 
spirits, for redistillation; or (2) To the bonded premises from which 
withdrawn pending subsequent removal for a lawful purpose.
    (b) Spirits withdrawn for use in wine production. Wine spirits 
withdrawn under Sec. 19.532 for use in wine production, and not so used, 
may be returned to the bonded premises of a distilled spirits plant. The 
consignee proprietor shall obtain approval, as provided in Sec. 19.506. 
The wine spirits shall be removed from the winery in accordance with the 
provisions of 27 CFR part 240.
    (c) Spirits withdrawn for research, development, or testing. Spirits 
withdrawn without payment of tax, under the provisions of subpart V of 
this part, for research, development, or testing may be returned to the 
bonded premises of the distilled spirits plant from which withdrawn. 
After returning these spirits to bonded premises, they shall be 
destroyed, returned to containers, or returned to vessels in the 
distilling system containing similar spirits.
    (d) Procedure. When spirits are received, they shall be gauged by 
the proprietor. When spirits which were removed for exportation are 
returned to bonded premises pending subsequent removal for a purpose 
other than exportation, all export marks on the containers in which the 
spirits are returned shall be obliterated.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1365, as amended, 
1382, as amended (26 U.S.C. 5214, 5223, 5373); sec. 3, Pub. L. 91-659, 
84 Stat. 1965, as amended (26 U.S.C. 5066))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23952, June 7, 1985]

Sec. 19.687  Return of spirits withdrawn for export with benefit of 
          drawback.

    Subject to the provisions of 27 CFR 252.197 through 252.199, whole 
or partial shipments of spirits withdrawn for export with benefit of 
drawback may be returned to: (a) The bonded premises of the distilled 
spirits plant, pursuant to Sec. 19.681, or (b) to a wholesale liquor 
dealer or taxpaid storeroom. Claims filed by proprietors on ATF Form 
5110.30 which include the returned spirits shall be reduced by the 
amount of tax paid or determined on the returned spirits.


[[Page 377]]


(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended (26 U.S.C. 5062); 
sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))

Sec. 19.688  Abandoned spirits.

    Spirits abandoned to the United States may be sold, without payment 
of the tax, to a proprietor of a plant for denaturation or for 
redistillation and denaturation, if the plant is authorized to denature 
or redistill and denature spirits. These spirits shall be kept apart 
from all other spirits or denatured spirits until denatured. The receipt 
and gauging provisions of Sec. 19.683 are applicable to these spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5243))

                          Voluntary Destruction

Sec. 19.691  Voluntary destruction.

    (a) General. Spirits, denatured spirits, articles, or wines in bond 
may be voluntarily destroyed as provided in this section. The tax 
liability on spirits, denatured spirits, articles, or wines so destroyed 
is extinguished.
    (b) Wine notice. Wine may be destroyed in bond only after the 
proprietor has filed notice with the regional director (compliance) 
stating the kind and quantity of wine to be destroyed and the date and 
manner in which the wine is to be destroyed. The wine may be destroyed 
after such notice has been filed.
    (c) Gauging. A proprietor shall gauge spirits, denatured spirits, 
articles, or wines to be destroyed. Gauges of spirits in bottles may be 
established on the basis of legible case markings and label information 
when:
    (1) The bottles are full;
    (2) There is no evidence that the bottles have been tampered with.
    (d) Off bonded premises. Spirits, denatured spirits, articles or 
wines may be removed and destroyed at a location off bonded premises if 
the proprietor has filed a consent of surety to cover such removal. If 
the destruction is accomplished off plant premises, the proprietor shall 
ensure compliance with applicable Federal, State, and local 
environmental laws and regulations.
    (e) Record of destruction. The proprietor shall record the 
destruction of spirits, denatured spirits, articles, or wines as 
provided in Sec. 19.767.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1381, as amended 
(26 U.S.C. 5008, 5370))

                      Subpart V--Samples of Spirits

Sec. 19.701  Spirits withdrawn from bonded premises.

    (a) Samples withdrawn from bonded premises. The proprietor may 
withdraw spirits without payment of tax, or wine spirits or brandy free 
of tax, to the proprietor's laboratory, the laboratory of an affiliated 
or subsidiary corporation, or, if approved by the regional director 
(compliance), to a recognized commercial laboratory for testing or 
analysis (other than consumer testing or other market analysis) to 
determine the quality or character of the finished product. The quantity 
of spirits so withdrawn shall not exceed the amount necessary for 
conduct of the proprietor's operations.
    (b) Customer samples. A quantity of spirits not exceeding 1 liter 
may be furnished to a prospective purchaser for quality testing (other 
than consumer testing or other market analysis) only if a bona fide 
written or oral purchase agreement exists which is contingent upon 
quality approval by the prospective purchaser; except that a sample not 
to exceed 1 liter may be furnished to a prospective customer for quality 
testing in anticipation of a purchase agreement if the customer is 
authorized to receive bulk spirits for industrial use.
    (c) Research or development. Spirits may be withdrawn without 
payment of tax for research, development, or testing (other than 
consumer testing or other market analysis) of processes, systems, 
materials or equipment relating to distilled spirits or distilled 
spirits plant operations. The amount withdrawn shall be limited to an 
amount necessary for conduct of the testing, research or development. If 
the testing, research or development is to be conducted by other than 
the proprietor, the proprietor shall secure a written statement, 
executed by the consignee, agreeing that he will maintain records of the 
receipt, use, and disposition of all spirits received by him and that

[[Page 378]]

those records and operations will be available during regular business 
hours for inspection by ATF officers.
    (d) Conditions. (1) Records will be maintained in accordance with 
Sec. 19.766 of all spirits taken or withdrawn under the provisions of 
this section.
    (2) Remnants or residues of spirits withdrawn but not used during 
testing, research or development shall be destroyed or returned to the 
bonded premises for storage with similar products or entry in the 
continuous distilling system.
    (e) Limitation. The regional director (compliance) shall proceed to 
collect the tax on any spirits withdrawn under this section which are 
found to have been withdrawn, used or disposed of in a manner not 
authorized by this section.
    (f) Losses. When spirits are lost prior to being used for the 
authorized purpose, the proprietor shall either pay the tax or file a 
claim for remission of tax as prescribed by Sec. 19.41.

(Sec. 201, Pub. L. 86-859, 72 Stat. 1362, as amended, 1382, as amended 
(26 U.S.C. 5214, 5173))

Sec. 19.702  Samples used on bonded premises.

    The proprietor may take samples of spirits for research, 
development, testing, or laboratory analysis conducted in a laboratory 
located on the bonded premises of the distilled spirits plant. The 
applicable purposes, conditions and limitations for samples taken 
pursuant to Sec. 19.701 shall also apply to samples taken as authorized 
by this section.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1382, as amended 
(26 U.S.C. 5008))

Sec. 19.703  Taxpayment of samples.

    When tax is required to be paid on samples:
    (a) If the proprietor is qualified to defer payment of tax, the tax 
shall be included in the proprietor's semimonthly tax return on Form 
5000.24.
    (b) If the proprietor is not qualified to defer the payment of tax, 
the tax shall be paid on a prepayment tax return on Form 5000.24.

[T.D. ATF-219, 50 FR 51388, Dec. 17, 1985]

Sec. 19.704  Labels.

    (a) On each container of spirits to be withdrawn under the 
provisions of Sec. 19.701, the proprietor shall affix a label showing 
the following information:
    (1) Purpose for which withdrawn;
    (2) Kind of spirits;
    (3) Size and the proof of the sample, if known;
    (4) If the spirits are removed to other then adjacent or contiguous 
premises of the proprietor, the name and address of the consignee;
    (5) The proprietor's name, and plant number; and
    (6) The date taken.
    (b) The labeling required by paragraph (a) of this section is not 
necessary when sample containers bear an approved label pursuant to 27 
CFR Part 5 and subpart S of this part and the sample is removed from 
bonded premises to the general premises of the same distilled spirits 
plant.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1362, as amended, 
1382, as amended (26 U.S.C. 5206, 5214, 5373))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23952, June 7, 1985]

                     Subpart W--Records and Reports

                                 General

Sec. 19.721  Records.

    (a) In General. (1) The records to be maintained by proprietors 
shall include:
    (i) All individual transaction forms, records, and summaries 
specifically required by this part;
    (ii) All supplemental, auxiliary, and source data utilized in the 
compilation of required forms, records, and summaries, and for 
preparation of reports, returns, and claims; and
    (iii) Copies of notices, reports, returns, and approved applications 
and other documents relating to operations and transactions.
    (2) The records required by this part may consist of the 
proprietor's commercial documents, rather than records prepared 
expressly to meet the requirements of this part, if such documents 
contain all the details required

[[Page 379]]

by this part to be recorded, are consistent with the general 
requirements of clarity and accuracy, and do not result in difficulty in 
their examination.
    (b) Accounts. The records required by this part to be maintained by 
proprietors shall be arranged into three primary operational accounts:
    (1) Production,
    (2) Storage, and
    (3) Processing.

Records shall indicate receipts, movements between accounts, transfers 
in bond, or withdrawals of spirits, denatured spirits, articles, or 
wines.
    (c) Exceptions. The term ``records'' as used in this subpart does 
not include copies of qualifying documents required under subpart G, or 
of bonds required under Subpart H of this part.
    (d) Special provisions. See 27 CFR 70.22 for information with 
respect to ATF examination of financial records and books of account.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.722  Conversion between metric and U.S. units.

    When liters are converted to wine gallons, the quantity in liters 
shall be multiplied by 0.264172 to determine the equivalent quantity in 
wine gallons. Cases containing the same quantity of spirits of the same 
proof in metric bottles may be converted to U.S. units by multiplying 
the liters in one case by the number of cases to be converted, as 
follows: (a) If the conversion from liters to U.S. units is made before 
multiplying by the number of cases, the quantity in U.S. units shall be 
rounded to the sixth decimal; or (b) If the conversion is made after 
multiplying by the number of cases, the quantity in U.S. units shall be 
rounded to the nearest hundredth. Once converted to wine gallons, the 
proof gallons of spirits in cases shall be determined as provided in 27 
CFR 30.52.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.723  Maintenance and preservation of records.

    (a) Place of maintenance. Records required by this part shall be 
prepared and kept by the proprietor at the plant where the operation or 
transaction occurs and shall be available for inspection by any ATF 
officer during business hours.
    (b) Reproduction of original records. (1) Whenever any record, 
because of its condition, becomes unsuitable for its intended or 
continued use, the proprietor shall reproduce such record, by a process 
approved by the regional director (compliance) under Sec. 19.725 for 
reproducing records, and such reproduction shall be treated and 
considered for all purposes as though it were the original record.
    (2) All provisions of law applicable to the original record shall be 
applicable to such reproductions.
    (c) Retention of records. (1) Records required by this part shall be 
preserved for a period of not less than three years from the date 
thereof or the date of the last entry required to be made thereon, 
whichever is later. However, the regional director (compliance) may 
require records to be kept for an additional period not exceeding three 
years in any case where such retention is deemed necessary or advisable 
for the protection of the revenue.
    (2) The period for retention of records prescribed in paragraph 
(c)(1) of this section shall not apply to copies of outstanding approved 
formulas or to copies of formulas which form the basis for claims for 
credit or refund of taxes on spirits returned to bonded premises. A copy 
of any such formula shall be kept by the proprietor at the plant where 
spirits are processed subject to the formula or at the plant where such 
spirits are received.
    (d) Data processing. (1) Notwithstanding any other provision of this 
section, record data maintained on data processing equipment may be kept 
at a location other than the plant premises if the original transaction 
(source) records required by Secs. 19.736-19.779 are kept available for 
inspection at the plant premises.
    (2) Data which has been accumulated on cards, tapes, discs, or other 
accepted record media must be retrievable within five business days.
    (3) The applicable data processing program shall be made available 
for examination if requested by an ATF officer.


[[Page 380]]


(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.724  Modified forms.

    (a) Application. Proprietors desiring to modify prescribed forms 
shall submit an application to the Director, through the regional 
director (compliance). The application shall be accompanied by:
    (1) A copy of each proposed form with typical entries; and
    (2) A statement showing the need for use of the modified forms. 
Modified forms shall not be used until approved by the Director.
    (b) Restrictions. The use of modified forms shall not relieve a 
proprietor from any requirement of this part. The Director may require a 
proprietor to immediately discontinue the use of any modified form when 
such use is found to pose administrative problems.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.725  Photographic copies of records.

    (a) Application. Proprietors who desire to record, copy or reproduce 
records, required by this part, by any process which accurately 
reproduces or forms a durable medium for so reproducing the original of 
such records, shall apply to the regional director (compliance) for 
permission to do so, describing:
    (1) The records to be reproduced,
    (2) The reproduction process to be employed,
    (3) The manner in which the reproductions are to be preserved, and
    (4) The provisions to be made for examining, viewing, and using such 
reproductions.
    (b) Approval. The regional director (compliance) shall not approve 
any application unless the manner of preservation of the reproductions 
and the provisions for examining, viewing, and using such reproductions 
are satisfactory.
    (c) Conditions. Whenever records are reproduced under this section, 
the reproduced records shall be preserved in conveniently accessible 
files, and provisions shall be made for examining, viewing, and using 
the reproduced record the same as if it were the original record, and it 
shall be treated and considered for all purposes as though it were the 
original record. All provisions of law and regulations applicable to the 
original shall be applicable to the reproduced record. As used in this 
section, ``original record'' shall mean the record required by this part 
to be maintained or preserved by the proprietor, even though it may be 
an executed duplicate or other copy of the document.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended, (26 U.S.C 5555))

Sec. 19.726  Authorized abbreviations to identify spirits.

    The following abbreviation may be used, either alone or in 
conjunction with descriptive words, to identify the kind of spirits on 
forms or records:

------------------------------------------------------------------------
              Kinds of spirits                      Abbreviations
------------------------------------------------------------------------
Alcohol....................................  A
Brandy.....................................  BR
Bourbon Whisky.............................  BW
Canadian Whisky............................  CNW
Completely Denatured Alcohol...............  CDA
Corn Whisky................................  CW
Grain Spirits..............................  GS
Irish Whisky...............................  IW
Light Whisky...............................  LW
Malt Whisky................................  MW
Neutral Spirits............................  NS
Neutral Spirits Grain......................  NSG
Rye Whisky.................................  RW
Scotch Whisky..............................  SW
Specially Denatured Alcohol................  SDA
Special Denatured Rum......................  SDR
Tequila....................................  TEQ
Vodka......................................  V
Whisky.....................................  W
------------------------------------------------------------------------

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

                                 Records

Sec. 19.731  General.

    (a) Entries. (1) Each entry required by this part to be made in 
daily records shall be made on the day on which the operation or 
transaction occurs.
    (2) When the proprietor prepares supplemental or auxiliary records 
concurrent with the individual operation or transaction, and these 
records contain all the required information with respect to the 
operation or transaction, entries in daily records may be deferred not 
later than the close of business the third business day succeeding

[[Page 381]]

the day on which the operation or transaction occurs.
    (b) Content. (1) All entries in the daily records required by this 
subpart shall show the date of the operation or transaction.
    (2) Daily records shall accurately and clearly reflect the details 
of each operation or transaction and, as applicable, contain all data 
necessary to enable:
    (i) Identification and proper marking and labeling of spirits, 
denatured spirits, or wines;
    (ii) Proprietors to prepare summaries, reports, and returns required 
by this part; and
    (iii) ATF officers to:
    (A) Verify and trace the quantity and movement of materials, 
spirits, denatured spirits, wines, or alcoholic flavoring materials 
involved in each transaction or operation;
    (B) Verify tax determinations and claims; and
    (C) Ascertain whether there has been compliance with law and 
regulations.
    (c) Format. (1) Proprietor's copies of prescribed forms which bear 
all required details shall be utilized as daily records.
    (2) In instances when a form is not prescribed, the records required 
by this subpart shall be those commercial records used by the proprietor 
in his accounting system and shall bear all required details.
    (3) Daily records required by this part shall be so maintained that 
they clearly and accurately reflect all mandatory information. Where the 
format or arrangement of the daily records is such that the information 
is not clearly or accurately reflected, the regional director 
(compliance) may require a format or arrangement which will clearly and 
accurately reflect the information.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.732  Details of daily records.

    The daily records required by this part shall conform to the 
following requirements:
    (a) Spirits shall be recorded by kind and by quantity in proof 
gallons, except as provided in Sec. 19.751.
    (b) Denatured spirits shall be recorded by formula number and by 
quantity in wine gallons.
    (c) Distilling materials produced on the premises shall be recorded 
by kind and by quantity in wine gallons. Chemical byproducts containing 
spirits, articles, spirits residues, and distilling materials received 
on the premises shall be recorded by kind, by percent of alcohol by 
volume, and by quantity in wine gallons. However, when nonliquid 
distilling materials which are not susceptible to such quantitative 
determination are received, the quantity of such materials may be 
determined by weight and shall be so recorded, and the alcohol content 
need not be recorded. When it can be shown that it is impractical to 
weigh or otherwise determine the exact quantity of such nonliquid 
materials, the proprietor may estimate the weight or volume of the 
material.
    (d) Wines shall be recorded by kind, by quantity in wine gallons, 
and by percent of alcohol by volume.
    (e) Alcoholic flavoring materials shall be recorded by kind, formula 
number (if any) and by quantity in proof gallons.
    (f) Containers (other than those bearing lot identification numbers) 
or cases involved in each operation or transaction shall be recorded by 
type, serial number, and the number of containers (including identifying 
marks on bulk conveyances), or cases. However, spirits withdrawn in 
cases may be recorded without the serial numbers of the cases, unless 
the regional director (compliance) requires such recording. Package 
identification numbers, number of packages, and proof gallons per 
package shall be recorded on deposit record in the storage account 
reflecting production gauges or filling of packages from tanks, however, 
only the lot identification, number of packages, and proof gallons per 
package need be shown for transactions in packages of spirits unless 
package identification numbers are specifically required by this part.
    (g) Materials intended for use in the production of spirits shall be 
recorded by kind and by quantity, recording liquids in gallons and other 
materials in

[[Page 382]]

pounds, and giving the sugar content for molasses.
    (h) The name and address of the consignee or consignor, and if any, 
the plant number or industrial use permit number of such person, shall 
be recorded for each receipt or removal of materials, spirits, denatured 
spirits, articles, spirits residues, and wine.
    (i) The serial number of the tank used shall be recorded for each 
operation or transaction.
    (j) The rate of duty paid on imported spirits shall be shown on the 
transaction forms or records.
    (k) Records shall identify imported spirits, spirits from Puerto 
Rico, and spirits from the Virgin Islands, or the records shall show 
that a distilled spirits product contains such spirits.
    (l) Records shall identify spirits that are to be used exclusively 
for fuel use.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

                           Production Account

Sec. 19.736  Daily production records.

    (a) Spirits production. Each proprietor shall maintain daily 
production account records of production operations showing:
    (1) The receipt of fermenting material or other nonalcoholic 
material intended for use in the production of spirits.
    (2) The receipt and use of spirits, denatured spirits, articles, and 
spirits residues received for redistillation.
    (3) The fermenting material set in each fermenter or other material 
used in the production of spirits.
    (4) The distilling material produced, received for production, and 
used in production of spirits, or destroyed or removed from the premises 
before being distilled (including the residue of beer returned to the 
producing brewery).
    (5) The gauge of spirits in each receiving tank, the production 
gauge (in proof gallons) of spirits removed from each tank, and the 
transaction form or record and its serial number covering each removal. 
The details of individual packages filled pursuant to production gauge 
for immediate withdrawal from bonded premises shall also be recorded.
    (6) The fermenting materials or other nonalcoholic materials used or 
removed from the premises.
    (7) The quantity and testing for alcoholic content of fusel oil or 
other chemicals removed from the production system and the disposition 
thereof with the name of the consignee, if any.
    (8) The kind and quantity of distillates removed from the production 
system pursuant to Sec. 19.322.
    (9) The kind and quantity of spirits, lost or destroyed prior to 
production gauge. Records pertaining to the production account shall be 
maintained in such a manner that the spirits produced may be traced 
through the distilling system to the mash or other material from which 
produced, and the identity of the spirits thus traced may be clearly 
established.
    (b) Byproduct spirit production. Each proprietor who manufactures 
substances other than spirits, in a process which produces spirits as a 
byproduct, shall maintain daily production records as to each such 
process showing:
    (1) The kind and quantity of materials received, unless included in 
records maintained under paragraph (a) of this section.
    (2) The spirits produced and disposed of.
    (3) The kind and quantity of other substances produced.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]

                             Storage Account

Sec. 19.740  Daily storage records.

    (a) General. Proprietors shall maintain daily records in the storage 
account which shall show for each kind of spirits or wine, as 
applicable:
    (1) Spirits or wines received for deposit in storage;
    (2) Spirits mingled;
    (3) Spirits in tanks;
    (4) Spirits or wines filled into packages from tanks and retained 
for storage;
    (5) Spirits of less than 190 degrees of proof or wines transferred 
from one tank to another;
    (6) Spirits returned to bond;

[[Page 383]]

    (7) Spirits or wines voluntarily destroyed;
    (8) Spirits or wines lost during storage;
    (9) The transfer of spirits or wine from one package to another;
    (10) The addition of oak chips to spirits and the addition of 
caramel to brandy or rum; and
    (11) The disposition of spirits or wines.
    (b) Records covering deposits. The proprietor's copies of gauge 
records, transfer records, or tank records of wines or spirits of less 
than 190 degrees of proof covering: deposit in the storage account of 
spirits received from the production account, from customs custody, or 
by return to bond under subpart U of this part, or of wines or spirits 
from other bonded premises; packages of spirits or wines filled from 
tanks and retained in the storage account after mingling; and wines or 
spirits of less than 190 degrees of proof transferred from one tank to 
another, shall be utilized by the proprietor to record wines or spirits 
deposited in the storage account. The proprietor shall enter the date of 
deposit of the spirits in storage on the record. Files of deposit 
records shall be maintained for spirits in packages and such files shall 
be arranged by producers (by warehouseman in the case of blended rums or 
brandies and for spirits of 190 degrees or more of proof, by the 
warehouseman who received the spirits from customs custody in the case 
of imported spirits, and by producer in the Virgin Islands or Puerto 
Rico in the case of Virgin Islands or Puerto Rican spirits), in 
chronological order according to the date of deposit in the storage 
account, and, when possible, in sequence by lot identification for 
packages. (For the purpose of records under this section spirits 
produced under trade names shall be treated as being produced under the 
real name of the proprietor [producer].) Also, files of deposit records 
shall be maintained, in the manner prescribed by 19.742, for wines and 
for spirits of less than 190 degress of proof in tanks in the storage 
account with a separate file for each tank of wines or spirits. In the 
case of spirits of 190 degrees or more of proof deposited in tanks in 
the storage account, the proprietor shall maintain a separate 
consolidated file of deposit records for all tanks, separately as to 
gin, vodka, and other spirits as applicable, of all such domestic 
spirits; all such imported spirits duty paid at the beverage rate; all 
such imported spirits duty paid at the nonbeverage rate; all such Virgin 
Islands spirits; and all such Puerto Rican spirits. Such files shall be 
arranged chronologically by date of deposit in the warehouse.
    (c) Records covering withdrawals. When wines or spirits other than 
spirits of 190 degrees or more of proof in tanks in the storage account, 
are withdrawn from the storage account the proprietor shall note on the 
record of deposit, the date and disposition of the spirits so that the 
files shall currently reflect the spirits remaining in the storage 
account. When spirits of 190 degrees or more of proof are withdrawn from 
tanks in the storage account the record of deposit need not be noted, 
but semi-annually (as of June 30 and December 31) the proprietor shall 
remove from his consolidated files of active deposit records all such 
records in excess of those required to cover the quantity of spirits 
shown as remaining in tanks. The deposit records so removed shall be 
those covering spirits first deposited in the storage account.

(Sec. 807, Pub. L. 96-39 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.741  Package summary records.

    (a) General. Each warehouseman shall keep current summary records 
for each kind of spirits or wines in packages, to show the spirits or 
wines deposited in, withdrawn from, and remaining in the storage 
account. Separate accounting records shall be kept for domestic spirits, 
imported spirits, Virgin Islands spirits, Puerto Rican spirits, and 
wine. Package accounts for spirits may be kept by either the season or 
the year the packages were filled with spirits.
    (b) Arrangement. Package summary records shall be prepared and 
arranged separately:
    (1) For domestic spirits of less than 190 degrees of proof, 
alphabetically by State and numerically by the plant number and name of 
the producer or warehouseman.

[[Page 384]]

    (2) For domestic spirits of 190 degrees or more of proof, 
alphabetically by State, and numerically by the plant number and name of 
the warehouseman.
    (3) For imported spirits, alphabetically by State and numerically by 
the plant number and name of the warehouseman who received the spirits 
from customs custody.
    (4) For Puerto Rican or Virgin Islands spirits, alphabetically by 
the name of the producer in Puerto Rico or the Virgin Islands.
    (5) For wine, by kind and tax rate imposed by 26 U.S.C. 5041.
    (c) Details. Package summary records shall show the following 
details:
    (1) The date the summarized transactions occurred;
    (2) For spirits, the number of packages and the proof gallons 
contained therein;
    (3) For wine, the number of packages and the wine gallons contained 
therein;
    (4) Gains or shortages disclosed by inventory or when an account is 
closed; and
    (5) Gallon balances on summary records for spirits and wines 
remaining in the account at the end of each month.
    (d) Summarization. Package summary records shall be consolidated at 
the end of each month, or for lesser periods when required by the 
regional director (compliance), to show for all types of containers and 
kinds of spirits, the total proof gallons received in, withdrawn from, 
and remaining in the storage account.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.742  Tank record of wine or spirits of less than 190 degrees of 
          proof.

    (a) General. Proprietors shall keep a record for each tank 
(including bulk conveyance) containing wine or spirits of less than 190 
degrees of proof to show deposits into, withdrawals from, and the 
balance remaining in each tank in the storage account. A new record 
shall be prepared each time wine or spirits are deposited in an empty 
tank. Except as otherwise provided in this section, each transaction 
shall be recorded on the day the transaction occurs.
    (b) Arrangement. Tank records shall be prepared and arranged:
    (1) For domestic spirits, alphabetically by State, and numerically 
by (i) the plant number and name of the producer, or, (ii) for blended 
rums or brandies, the plant number and name of the warehouseman;
    (2) For imported spirits, alphabetically by State, and numerically 
by the plant number and name of the warehouseman;
    (3) For Puerto Rican or Virgin Islands spirits, alphabetically by 
the name of the producer in Puerto Rico or the Virgin Islands; and
    (4) For wine, by kind and tax rate imposed by 26 U.S.C. 5041.
    (c) Details. Tank records shall show the following details:
    (1) Tank record serial number, beginning with ``1'' for each record 
initiated on or after January 1;
    (2) Date of each transaction;
    (3) Identification of the tank;
    (4) Kind of wine or spirits;
    (5) Number and average proof gallon content of packages of spirits 
dumped in the tank, or a notation indicating the deposit in the tank of 
spirits by pipeline;
    (6) Wine gallons of wine, or proof gallons of spirits deposited;
    (7) If subject to age, the age of the youngest spirits in years, 
months and days, each time spirits are deposited;
    (8) Wine gallons of wine, or proof gallons of spirits withdrawn;
    (9) Related transaction form or record and its serial number for 
deposits or withdrawals;
    (10) Wine gallons of wine, or proof gallons of spirits remaining in 
the tank, recorded at the end of each calendar month; and
    (11) Gain or loss disclosed by inventory or on emptying of the tank.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.743  Tank summary record for spirits of 190 degrees or more of 
          proof.

    (a) General. Proprietors shall keep a tank summary record for 
spirits of 190 degrees or more of proof held in tanks to show the proof 
gallons deposited into, withdrawn from, and remaining

[[Page 385]]

in tanks in the storage account. A separate tank summary record shall be 
prepared for each kind of spirits of 190 degrees or more of proof. 
Entries shall be made for each day in which a transaction occurs, and 
shall be recorded as a summary of the individual transactions shown on 
the deposit records.
    (b) Arrangement. Tank summary records shall be prepared and 
arranged:
    (1) For domestic spirits, alphabetically by State, and numerically 
by the plant number and name of the warehouseman;
    (2) For imported spirits, alphabetically by State, and numerically 
by the plant number of the warehouseman who received the spirits from 
customs custody; and
    (3) For spirits from Puerto Rico or the Virgin Islands, 
alphabetically by the name of the producer in Puerto Rico or the Virgin 
Islands.
    (c) Details. Tank summary records shall show the following details:
    (1) Kind of spirits;
    (2) Date of transactions summarized;
    (3) Proof gallons deposited;
    (4) Proof gallons withdrawn;
    (5) Proof gallons remaining in tanks; and
    (6) Gain or loss disclosed by inventory or on emptying of the tanks 
summarized on the record.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

                           Processing Account

Sec. 19.746  Processing.

    Each processor shall maintain daily records of transactions and 
operations with respect to:
    (a) Manufacture of distilled spirits products;
    (b) Finished products;
    (c) Denaturation of spirits; and
    (d) Manufacture of articles.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.747  Records of manufacturing.

    Each processor shall maintain daily records of the details of 
manufacturing operations, showing:
    (a) The spirits, wines, and alcoholic flavoring materials received. 
The total receipts shall be summarized showing (1) the spirits received 
from storage or production at the same plant, (2) the spirits received 
from other plants by transfer in bond, (3) spirits received from customs 
custody, (4) wines received from the storage account at the same plant, 
(5) wines received by transfer in bond, and (6) alcoholic flavoring 
materials received.
    (b) The spirits, wines, alcoholic flavoring materials, and other 
ingredients used in the manufacture of a distilled spirits products 
showing the serial number of the dump/batch record covering such dump.
    (c) Bottling or packaging of each batch of spirits, showing the 
serial numbers of the bottling and packaging records covering such 
bottling or packaging.
    (d) The results of bottling proof and fill tests as required by 
Sec. 19.386.
    (e) Receipt, use and disposition of liquor bottles.
    (f) The rebottling, relabeling, and reclosing of bottled products as 
required by Secs. 19.392 and 19.393.
    (g) The spirits, wines, and alcoholic flavoring materials removed 
from the premises.
    (h) The spirits moved to the production account for redistillation.
    (i) Redistillation of spirits, including the production of gin and 
vodka by means other than original and continuous distillation.
    (j) Record of alcoholic flavoring materials deposited into tanks 
prior to dumping showing the consignor, the date and quantity received, 
the name of the product, the date and quantity of each removal from the 
tank and losses.
    (k) Spirits returned to bond.
    (l) The voluntary destruction of spirits and wines.
    (m) The losses as provided in subpart Q of this part.

The records required by paragraph (a) of this section shall also show 
the name and plant number of the producer or processor (warehouseman in 
the case of blended beverage rums or brandies or spirits of 190 degrees 
of more of proof received from storage) for domestic spirits, the name 
of the importer and the country of origin for imported spirits, and the 
name and address of the producer of wines and alcoholic flavoring 
materials.


[[Page 386]]


(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23953, June 7, 1985]

Sec. 19.748  Dump/batch records.

    (a) Format of dump/batch records. Proprietor's dump/batch records 
shall contain, as applicable, the following:
    (1) Serial number;
    (2) Name and distilled spirits plant number of the producer;
    (3) Kind and age of spirits used with a notation to indicate 
treatment with oak chips, addition of caramel, imported spirits, and 
spirits from Puerto Rico and the Virgin Islands;
    (4) Serial number of tank or container to which ingredients are 
added for use;
    (5) Serial or identification number of tank or container from which 
spirits are removed;
    (6) Quantity by ingredient of other alcoholic ingredients used, 
showing wine in wine gallons, percentage of alcohol by volume and proof, 
and alcoholic flavoring materials in proof gallons;
    (7) Serial number of source transaction record (e.g., record 
covering spirits previously dumped);
    (8) Date of each transaction;
    (9) Quantity, by ingredient (other than water), of nonalcoholic 
ingredients used;
    (10) Formula number;
    (11) Quantity of ingredients used in the batch that have been 
previously dumped, reported on dump records, and held in tanks or 
containers;
    (12) Total quantity in proof gallons of all alcoholic ingredients 
used;
    (13) Identification of each record to which spirits are transferred;
    (14) Quantity in each lot transferred;
    (15) Date of each transfer;
    (16) Total quantity in proof gallons of product transferred;
    (17) Gain or loss; and
    (18) For each batch to be tax determined in accordance with 
Sec. 19.35, the effective tax rate.
    (b) Redistillation. (1) Dump/batch records shall be prepared to show 
spirits to be redistilled in the processing account, including the 
production of gin or vodka by redistillation. A dump record shall also 
be prepared to record the finished distillate.
    (2) When redistillation requires the use of more than one tank or 
other vessel in a continuous distilling system, the system may be shown 
on the record in lieu of preparing a separate record to show each 
movement of spirits between tanks or vessels.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-297, 55 
FR 18064, Apr. 30, 1990]

Sec. 19.749  Bottling and packaging record.

    The bottling and packaging record shall be prepared and contain the 
following information:
    (a) Tank number(s);
    (b) Serial number (beginning with ``1'' at the start of each 
calendar or fiscal year);
    (c) Formula number (if any) under which the batch was produced;
    (d) Serial number of the dump/batch record from which received;
    (e) Kind of product (including age, if claimed);
    (f) Details of the tank gauge (including proof, wine gallons, proof 
gallons, and, if applicable, obscuration);
    (g) The date the bottles or packages were filled;
    (h) Size of the bottles or packages filled, number of bottles per 
case, and number of cases or packages filled;
    (i) Serial numbers by brand name of cases or other containers 
filled;
    (j) Proof of the spirits bottled or packaged (if different from 
subsection (f));
    (k) Total quantity bottled, packaged or otherwise disposed of in 
bulk;
    (l) Losses or gains; and
    (m) Whether the spirits were labeled as bottled in bond.

(Sec. 807(a), Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.750  Records of alcohol content and fill tests.

    (a) Proprietors shall record the results of all tests of alcohol 
content and quantity (fill) conducted.
    (b) The record shall be maintained in a manner and provide 
information that

[[Page 387]]

will enable ATF officers to determine whether the proprietor has 
complied with the provisions of Sec. 19.386 by:
    (1) Monitoring operations by conducting alcohol content and fill 
tests; and
    (2) Employing procedures to correct variations in alcohol content 
and fill.
    (c) Alcohol content and fill test records shall contain, at a 
minimum, the following information:
    (1) Date and time of test;
    (2) Bottling tank number;
    (3) Serial number of bottling record;
    (4) Bottling line designation;
    (5) Size of bottle;
    (6) Number of bottles tested;
    (7) Labeled alcohol content;
    (8) Alcohol content found by the test;
    (9) Percentage of variation from 100 percent fill; and
    (10) Corrective action taken, if any.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5555); 
Sec. 807(a), Pub. L. 96-39 (26 U.S.C. 5207)

[T.D. ATF-237, 51 FR 36395, Oct. 10, 1986; 51 FR 37271, Oct. 21, 1986]

Sec. 19.751  Records of finished products.

    Each processor shall maintain by proof gallons daily transaction 
records and a daily summary record of spirits bottled or packaged as 
follows:
    (a) Beginning and ending quantity of bottled or packaged spirits on 
hand;
    (b) Spirits bottled or packaged;
    (c) Bottled or packaged spirits disposed of by:
    (1) Withdrawal on tax determination;
    (2) Transfer in bond;
    (3) Withdrawal free of tax or without payment of tax;
    (4) Dumping for further processing;
    (5) Transfer to the production account for redistillation;
    (6) Voluntary destruction;
    (7) Accountable losses;
    (8) Samples;
    (9) Inventory shortages and overages; and
    (10) Other dispositions.

In lieu of showing the proof gallons of spirits on daily transaction 
records of withdrawals from bonded premises, proprietors may show the 
wine gallons or liters and the proof of spirits in cases. Summary 
records shall be used to compile the report required by Sec. 19.792.

(Sec. 807, Pub. L. 96-39, 93 Stat. 283, as amended (26 U.S.C. 5207))

Sec. 19.752  Denaturation records.

    (a) General. Each processor qualified to denature spirits shall 
maintain daily records of denaturation showing:
    (1) Spirits received for, and used in, denaturation;
    (2) Spirits, denatured spirits, recovered denatured spirits, spirits 
residues, and articles redistilled in the processing account for 
denaturation;
    (3) Kind and quantity of denaturants received, used in denaturation 
of spirits, or otherwise disposed of;
    (4) Conversion of denatured alcohol formulas in accordance with 
Sec. 19.460;
    (5) Denatured spirits produced, received, stored in tanks, filled 
into containers, removed, or otherwise disposed of;
    (6) Recovered denatured spirits or recovered articles received, 
restored, and/or redenatured;
    (7) Packages of denatured spirits filled with a separate record for 
each formula number and filed in numerical order according to the serial 
number or lot identification number of the packages;
    (8) Losses; and
    (9) Disposition of denatured spirits.
    (b) Record of denaturation. Each time spirits are denatured, a 
record shall be prepared to show the formula number, the tank in which 
denaturation takes place, the proof gallons of spirits before 
denaturation, the quantity of each denaturant used (in gallons, or in 
pounds or ounces), and wine gallons of denatured spirits produced.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.753  Record of article manufacture.

    Each processor qualified to manufacture articles shall maintain 
daily records arranged by the name and authorized use code of the 
article to show the following:
    (a) Quantity, by formula number of denatured spirits used in the 
manufacture of the article;
    (b) Quantity of each article manufactured; and

[[Page 388]]

    (c) Quantity of each article removed, or otherwise disposed of, 
including the name and address of the person to whom sold or otherwise 
disposed of.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

                               Tax Records

    Source: Sections 19.761 through 19.765 added by T.D. ATF-297, 55 FR 
18064, Apr. 30, 1990, unless otherwise noted.

Sec. 19.761  Record of tax determination.

    A serially numbered invoice or shipping document, signed or 
initialed by an agent or employee of the proprietor, will constitute the 
record of tax determination. Although neither the proof gallons nor 
effective tax rates need be shown on the record of tax determination, 
there shall be shown on each invoice or shipping document sufficient 
information to enable ATF officers to determine the total proof gallons 
and, if applicable, each effective tax rate and the proof gallons 
removed at each effective tax rate. For purposes of this part, the total 
proof gallons calculated from each invoice or shipping document 
constitutes a single withdrawal.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.762  Daily summary record of tax determinations.

    Each proprietor of a distilled spirits plant who withdraws distilled 
spirits on determination of tax, but before payment of tax, shall 
maintain a daily summary record of tax determinations. The summary 
record will show, for each day on which tax determinations occur:
    (a) The serial numbers of the records of tax determination, the 
total proof gallons, rounded to the nearest tenth proof gallon on which 
tax was determined at each effective tax rate, and the total tax; or
    (b) The serial numbers of the records of tax determination, the 
total tax for each record of tax determination and the total tax.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.763  Record of average effective tax rates.

    (a) For each distilled spirits product to be tax determined in 
accordance with Sec. 19.37, the proprietor shall prepare a daily summary 
record showing the--
    (1) Serial number of the batch record of each batch of the product 
which will be bottled or packaged, in whole or in part, for domestic 
consumption;
    (2) Proof gallons in each such batch derived from distilled spirits, 
eligible wine, and eligible flavors; and
    (3) Tax liabilities of each such batch determined as follows:
    (i) Proof gallons of all distilled spirits (exclusive of distilled 
spirits derived from eligible flavors), multiplied by the tax rate 
prescribed in 26 U.S.C. 5001;
    (ii) Wine gallons of each eligible wine, multiplied by the tax rate 
which would be imposed on the wine under 26 U.S.C. 5041(b)(1), (2), or 
(3) but for its removal to bonded premises; and
    (iii) Proof gallons of all distilled spirits derived from eligible 
flavors to the extent that such distilled spirits exceed 2\1/2\% of the 
proof gallons in the product, multiplied by the tax rate prescribed in 
26 U.S.C. 5001.
    (b) At the end of each month during which the product is 
manufactured, the proprietor shall determine the--
    (1) Total proof gallons and total tax liabilities for each summary 
record prescribed by paragraph (a) of this section;
    (2) Add the sums from paragraph (b)(1) of this section to the like 
sums determined for each of the preceding five months; and
    (3) Divide the total tax liabilities by the total proof gallons.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.764  Inventory reserve records.

    (a) General. The proprietor shall establish an inventory reserve 
account, as provided in this section, for each eligible distilled 
spirits product to be tax determined in accordance with Sec. 19.38.
    (b) Deposit records. For each batch of the product bottled or 
packaged, the proprietor shall enter into the inventory reserve account 
a deposit record,

[[Page 389]]

which may be combined with the bottling and packaging record required by 
Sec. 19.749 showing the:
    (1) Name of the product;
    (2) Bottling and packaging record serial number;
    (3) Date the bottling or packaging was completed;
    (4) Total proof gallons bottled and packaged; and
    (5) Effective tax rate of the product computed in accordance with 
Sec. 19.34.
    (c) Depletions. The inventory reserve account for each product will 
be depleted in the same order in which the deposit records were entered 
into such account. A depletion will be recorded for each disposition 
(e.g., a taxable removal, an exportation, an inventory shortage or 
breakage) by entering on the deposit record the:
    (1) Transaction date,
    (2) Transaction record serial number,
    (3) Proof gallons disposed of, and
    (4) Proof gallons remaining. If any depletion exceeds the quantity 
of product remaining on the deposit record, the remaining quantity will 
be depleted, the deposit record closed, and the remainder of the 
transaction depleted from the next deposit record.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.765  Standard effective tax rates.

    For each product to be tax determined using a standard effective tax 
rate in accordance with Sec. 19.36, the proprietor shall prepare a 
record of the standard effective tax rate computation showing, for one 
proof gallon of the finished product, the following information:
    (a) The name of the product;
    (b) The least quantity of each eligible flavor which will be used in 
the product, in proof gallons, or 0.025 proof gallon, whichever is less;
    (c) The least quantity of each eligible wine which will be used in 
the product, in proof gallons;
    (d) The greatest effective tax rate applicable to the product, 
calculated in accordance with Sec. 19.34 with the values indicated in 
paragraphs (a) and (b) of this section; and
    (e) The date on which the use of the standard effective tax rate 
commenced.

                              Other Records

Sec. 19.766  Record of samples.

    (a) Requirement. The proprietor shall maintain records of all 
samples taken pursuant to subpart V of this part.
    (b) Schedule. (1) When the proprietor takes samples pursuant to an 
established schedule, such schedule may be maintained as the required 
record if it contains that information required by paragraphs (c)(2) 
through (c)(8).
    (2) When unanticipated samples are taken, the schedule shall be 
appropriately supplemented.
    (c) Detail. Sample records shall show:
    (1) Date samples were taken;
    (2) Type and identification of container from which taken;
    (3) Account from which taken;
    (4) Purpose for which taken;
    (5) Size and number of samples taken;
    (6) Kind of spirits;
    (7) Disposition of the sample (e.g., destroyed, returned to 
containers or the distilling system, retained for library purposes); and
    (8) Name and address of the person to whom samples were sent when 
the samples are to be analyzed or tested elsewhere than at the plant 
where secured.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.767  Record of destruction.

    The proprietor shall record details of the voluntary destruction of 
spirits, denatured spirits, articles, or wines as follows:
    (a) Identification of the spirits, denatured spirits, articles, or 
wines to include, as applicable, kind, quantity, elements of gauge, name 
and permit number of the producer, warehouseman or processor, and 
identification and type of container.
    (b) The date, time, place and manner of the destruction;
    (c) A statement of whether or not the spirits had previously been 
withdrawn and returned to bond; and
    (d) The name and title of the proprietor's representative who 
accomplished or supervised the destruction.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[[Page 390]]

Sec. 19.768  Gauge record.

    When gauges are required to be made by this part or by the regional 
director (compliance), the proprietor shall prepare a gauge record to 
show:
    (a) Serial number, commencing with ``1'' at the start of each 
calendar or fiscal year;
    (b) Reason for making the gauge:
    (1) Production gauge and entry for deposit in the storage or 
processing account at the plant where produced;
    (2) Packaging of spirits or wine filled from a tank in the storage 
account at the same plant;
    (3) Transfer from the processing or storage account to the 
production account for redistillation;
    (4) Repackaging of spirits of 190 degrees or more of proof; or
    (5) Gauge on return to bond in the production or processing account 
of spirits, denatured spirits, recovered spirits, recovered denatured 
spirits, articles, recovered articles, or spirits residues.
    (c) Date of gauge;
    (d) Related form or record (identification, serial number and date);
    (e) Kind of spirits or formula number of denatured spirits;
    (f) Proof of distillation (not required for denatured spirits, 
spirits for redistillation, or spirits of 190 degrees or more of proof);
    (g) When containers are to be filled, the type and number of 
containers;
    (h) Age of spirits;
    (i) Name and plant number of the producer or warehouseman; and
    (j) Gauge data:
    (1) Package identification, tank number, volumetric or weight gauge 
details, proof, and wine gallons;
    (2) Cooperage identification (``C'' for charred, ``REC'' for 
recharred, ``P'' for plain, ``PAR''for paraffined, ``G'' for glued, or 
``R'' for reused);
    (3) Entry proof for whiskey;
    (4) Proof gallons per filled package; and
    (5) Total proof gallons of spirits or wine gallons of denatured 
spirits, recovered denatured spirits, articles, spirits residues, or 
wine.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.769  Package gauge record.

    When required by this part and Part 252, a record shall be prepared 
to document the gauge of packages of spirits and to convey information 
on package gauges. The following information shall be recorded:
    (a) Date prepared;
    (b) Identification of the related transaction form or record, and 
its serial number;
    (c) The name and plant number of the producer or processor (For 
blended rums or brandies enter name(s) and plant number of blending 
warehouseman. For spirits of 190 degrees or more of proof, name and 
plant number of the producer or warehouseman, as appropriate; where the 
packages have already been marked, the name and plant number marked 
thereon. For imported spirits, the name of the warehouseman who received 
the spirits from customs custody and name of importer. For Virgin 
Islands or Puerto Rican spirits, the name of the producer in the Virgin 
Islands or Puerto Rico);
    (d) proof of distillation for spirits not over 190 degrees proof; 
and
    (e) For each package--
    (1) Serial or identification number;
    (2) Designate wooden barrels as ``C'' for charred, ``REC'' for 
recharred, ``P'' for plain, ``PAR'' for paraffined, ``G'' for glued, 
``R'' for reused, and ``PS'' if a barrel has been steamed or water 
soaked before filling;
    (3) Kind of spirits;
    (4) Gross weight determined at the time of original gauge, regauge, 
or at time of shipment;
    (5) Present tare on regauge;
    (6) Net weight for filling gauge or regauge;
    (7) Proof;
    (8) Proof gallons for regauge;
    (9) Original proof gallons; and
    (10) Receiving weights, when a material difference appears on 
receipt after transfer in bond of weighed packages.

(Approved by the Office of Management and Budget under control number 
1512-0250)

(Sec. 807, Pub. L. 93-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23953, June 7, 1985]

[[Page 391]]

Sec. 19.770  Transfer record.

    (a) Consignor. When required by this part, proprietors shall prepare 
a transfer record. The transfer record shall show: (1) Serial number, 
commencing with ``1'' on January 1 of each year;
    (2) Serial number and date of ATF Form 5100.16 (not required for 
wine spirits withdrawn without payment of tax for use in wine 
production);
    (3) Name and distilled spirits plant number of consignor;
    (4) Name and distilled spirits plant number or bonded wine cellar 
number of the consignee;
    (5) Account from which the spirits or wines were removed for 
transfer (i.e., production, storage, or processing account);
    (6) Description of the spirits, denatured spirits, or wine--
    (i) Name and plant number of the producer, warehouseman or processor 
(Not required for denatured spirits or wine. For imported spirits, 
record the name and plant number of the warehouseman or processor who 
received the spirits from customs custody. For transfer of imported 
spirits from customs custody to ATF bond, record the name of the foreign 
producer. For Virgin Islands or Puerto Rican spirits, show the name of 
the producer in the Virgin Islands or Puerto Rico. For spirits of 
different producers or warehousemen which have been mixed in the 
processing account, record the name of the processor.);
    (ii) Kind of spirits or wines (For denatured spirits, show kind and 
formula number. For alcohol, show material from which produced. For bulk 
spirits and for alcohol in packages, show kind and proof. For other 
spirits and wines, use kind designation as defined in 27 CFR Part 4 or 5 
as appropriate);
    (iii) Age (in years, months, and days) and year of production;
    (iv) Number of packages or cases with their lot identification 
numbers or serial numbers and date of fill;
    (v) Type of container (If spirits, denatured spirits or wines are to 
be transferred by pipeline, show ``P/L''.);
    (vi) Proof gallons for distilled spirits, or wine gallons for 
denatured spirits or wine;
    (vii) Conveyance identification; and
    (viii) For distilled spirits products which contain eligible wine or 
eligible flavors, the elements necessary to compute the effective tax 
rate as follows:
    (A) Proof gallons of distilled spirits (exclusive of distilled 
spirits derived from eligible flavors);
    (B) Wine gallons of each eligible wine and the percentage of alcohol 
by volume of each; and
    (C) Proof gallons of distilled spirits derived from eligible 
flavors.
    (7) Notation to indicate when spirits are being transferred in bond 
from production facility to another plant;
    (8) Identification of seals, locks or other devices affixed to the 
conveyance or package (Permanent seals affixed to a conveyance and which 
remain intact need not be recorded on the transfer record when a 
permanent record is maintained);
    (9) Date; and
    (10) Signature and title of the consignor with the penalties of 
perjury statement required by Sec. 19.100.
    (b) Consignee. (1) When a proprietor receives wine from a bonded 
wine cellar, the consignee shall complete Form 703 covering such 
transfer in accordance with the instructions thereon.
    (2) When a proprietor receives spirits from an alcohol fuel plant or 
from customs custody, or spirits, denatured spirits and wines from the 
bonded premises of another distilled spirits plant, he shall record the 
results of such receipt on the related transfer record as follows:
    (i) Date of receipt;
    (ii) Notation whether the securing devices on the conveyance were or 
were not intact on arrival (not applicable to spirits transferred in 
unsecured conveyances or denatured spirits);
    (iii) Gauge of spirits, denatured spirits, or wine showing the tank 
number, proof (percent of alcohol by volume for wine) and elements of 
the weight or volumetric determination of quantity, wine gallons or 
proof gallons received, and any losses or gains;
    (iv) Notation of excessive in-transit loss, missing packages, 
tampering, or apparent theft;
    (v) Account into which the spirits, denatured spirits or wines were 
deposited (i.e., production, storage or processing); and

[[Page 392]]

    (vi) Signature and title of the consignee with the penalties of 
perjury statement required by Sec. 19.100.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-297, 55 
FR 18065, Apr. 30, 1990; 55 FR 23635, June 11, 1990]

Secs. 19.771-19.772  [Reserved]

Sec. 19.773  Daily record of wholesale liquor dealer and taxpaid 
          storeroom operations.

    Where the proprietor, in connection with his plant, conducts 
wholesale liquor dealer operations, or operates a taxpaid storeroom, on, 
contiguous to, adjacent to, or in the immediate vicinity of general 
plant premises, or operates taxpaid storage premises at another location 
from which distilled spirits are not sold at wholesale, he shall 
maintain daily records of the receipt and disposition of all distilled 
spirits and wines at such premises, and of all reclosing and relabeling 
operations. The provisions of this section shall also apply to products 
returned to a wholesale liquor dealer or taxpaid storeroom from the 
market. A separate record shall be kept for each such premises. The 
records in respect of the receipt and disposition of distilled spirits 
and wines shall contain all data necessary (consisting of or supported 
by records including bills of lading and invoices) to enable ATF 
officers to identify and trace such receipt and dispositions and to 
ascertain whether there has been compliance with all laws and 
regulations relating thereto. In addition to any other information shown 
therein, such records shall include:
    (a) For receipts and dispositions--
    (1) The date of the transaction (or date of discovery in the case of 
casualty or theft);
    (2) The name and address of each consignor or consignee, as the case 
may be;
    (3) The brand name;
    (4) The kind of spirits;
    (5) The actual quantity of distilled spirits involved (proof and 
proof gallons if in packages, wine gallons or liters and proof if in 
bottles);
    (6) The package identification or serial numbers of packages 
involved;
    (7) The name of the producer; and
    (8) The country of origin, if imported spirits.
    (b) For case dispositions--In addition to the requirements listed in 
paragraph (a) of this section the regional director (compliance) may, 
upon notice to the dealer, require the recording of case serial numbers 
for dispositions.
    (c) For reclosing or relabeling operations--
    (1) The date of the transaction;
    (2) The serial numbers of cases involved;
    (3) The total number of bottles;
    (4) The name of the bottler; and
    (5) The number and kind of strip stamps used and/or the number of 
alternative devices used.

(Approved by the Office of Management and Budget under control number 
1512-0198)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5555))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23953, June 7, 1985]

Sec. 19.774  Record of inventories.

    (a) General. Each proprietor shall make a record of inventories of 
spirits, denatured spirits, and wines required by Secs. 19.329, 19.353, 
19.401, 19.402, and 19.464. The following information shall be shown:
    (1) Date taken;
    (2) Identification of container(s);
    (3) Kind and quantity of spirits, denatured spirits, and wines;
    (4) Losses (whether by theft, voluntary destruction or otherwise), 
gains or shortages; and
    (5) Signature, under penalties of perjury, of the proprietor or 
person taking the inventory.
    (b) Production. Each proprietor shall record the quarterly inventory 
of spirits as provided in paragraph (a) of this section.
    (c) Storage. (1) Each proprietor shall record the quarterly 
inventory of spirits and wines (except those in packages) as provided in 
paragraph (a) of this section.
    (2) Gains or losses disclosed for each container shall be recorded 
on the current tank record (or summary record

[[Page 393]]

for spirits of 190 degrees or more of proof).
    (d) Processing. Each proprietor shall record inventories as provided 
in paragraph (a) of this section, and for:
    (1) Bulk spirits and wines in process, any gains or losses shall be 
recorded on the individual dump, batch, or bottling record;
    (2) Finished products in bottles and packages, any overages, losses, 
and shortages for the total quantity inventoried shall be recorded in 
records required by Sec. 19.751; and
    (3) Denatured spirits, any gains or losses shall be recorded in the 
record prescribed by Sec. 19.752.
    (e) Retention. Inventory records shall be retained by the proprietor 
and made available for inspection by ATF officers.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.775  Record of securing devices.

    Each proprietor shall maintain a record of securing devices by 
serial number showing the number received, affixed to conveyances (in 
serial order), and otherwise disposed of.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.776  Record of scale tests.

    Proprietors shall maintain records of results of tests conducted in 
accordance with Sec. 19.273 and Sec. 19.276.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.777  [Reserved]

Sec. 19.778  Removal on or after January 1, 1987 of Puerto Rican and 
          Virgin Islands spirits, and rum imported from all other areas.

    (a) General. The proprietor shall maintain separate accounts, in 
proof gallons, of Puerto Rican spirits having an alcoholic content of at 
least 92 percent rum, of Virgin Islands spirits having an alcoholic 
content of at least 92 percent rum, and of rum imported from all other 
areas removed from the processing account on determination of tax. 
Quantities of spirits in these categories that are contained in products 
mixed in processing with other alcoholic ingredients may be determined 
by using the methods provided in paragraphs (b), (c), or (d) of this 
section. The proprietor shall report these quantities monthly on Form 
5110.28, Monthly Report of Processing Operations, as provided in 
Sec. 19.792.
    (b) Standard method. For purposes of the separate accounts, 
quantities of spirits in the above categories may be determined based on 
the least amount of such spirits which may be used in each product as 
stated in the approved formula, ATF F 5110.38.
    (c) Averaging method. For purposes of the separate accounts, 
quantities of spirits in the above categories may be determined by 
computing the average quantity of such spirits contained in all batches 
of the same product formulation manufactured during the preceding 6-
month period. The average shall be adjusted at the end of each month so 
as to include only the preceding 6-month period.
    (d) Alternative method. Distilled spirits plant proprietors who wish 
to use an alternative method for determining the amount of spirits in 
these categories contained as ingredients of other distilled spirits 
products shall file an application with the Director. The written 
application shall specifically describe the proposed alternative method, 
and shall set forth the reasons for using the alternative method.
    (e) Transitional rule. On January 1, 1987 the proprietor shall take 
physical inventories of all Puerto Rican spirits, Virgin Islands 
spirits, and rum imported from all other areas which were received into 
the processing account prior to that date. These inventories may be 
taken as provided in Sec. 19.402(a)(2). The results of the inventories 
shall be submitted in a letter to the regional director (compliance) 
within 30 days of the required date of the inventories.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended (26 U.S.C. 5555))

[T.D. ATF-239, 51 FR 40026, Nov. 4, 1986]

Sec. 19.779  Record of shipment of spirits and specially denatured 
          spirits withdrawn free of tax.

    (a) General. The proprietor shall prepare a record of shipment, and 
forward

[[Page 394]]

the original to the consignee and file a copy, when:
    (1) Samples of specially denatured spirits in excess of five gallons 
are withdrawn in accordance with Sec. 19.540(c)(2);
    (2) Spirits are withdrawn free of tax in accordance with 
Sec. 19.536(a)--(c); and
    (3) Specially denatured spirits are withdrawn free of tax in 
accordance with Secs. 19.536(d) and 19.540.
    (b) Form of record. (1) The record of shipment prescribed in this 
section may consist of a proprietor's commercial invoice, bill of 
lading, or another document intended for the same purpose. Any 
commercial document used as a record of shipment shall:
    (i) Be preprinted with the name and address of the proprietor,
    (ii) Be sequentially numbered, and
    (iii) Be consistently used for the intended purpose.
    (2) In addition to any other information on the document, the record 
of shipment shall contain, as applicable, the following information:
    (i) Date of shipment;
    (ii) Name, address, and permit number of consignee;
    (iii) Kind of spirits;
    (iv) Proof of spirits;
    (v) Formula number(s), for specially denatured spirits;
    (vi) Number and size of containers;
    (vii) Package identification numbers or serial numbers of 
containers; and
    (viii) Total wine gallons (specially denatured spirits) or total 
proof gallons (tax-free alcohol).

(Records relating to tax-free alcohol approved by the Office of 
Management and Budget under control number 1512-0334; records relating 
to specially denatured spirits approved by the Office of Management and 
Budget under control number 1512-0337)
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985]

Sec. 19.780  Record of distilled spirits shipped to manufacturers of 
          nonbeverage products.

    (a) General. Where distilled spirits are shipped to a manufacturer 
of nonbeverage products, the proprietor shall prepare a record of 
shipment, forward the original to the consignee, and retain a copy.
    (b) Form of record. The record of tax determination prescribed by 
Sec. 19.761, or any other document issued by the proprietor and 
containing the necessary information, may be used as the record of 
shipment.
    (c) Required information. In addition to any other information on 
the document, the document used as the record of shipment must contain 
the following information:
    (1) Name, address and registry number of the proprietor;
    (2) Date of shipment;
    (3) Name and address of the consignee;
    (4) Kind, proof, and quantity of distilled spirits in each 
container;
    (5) Number of containers of each size;
    (6) Package identification numbers or serial numbers of containers;
    (7) Serial number of the applicable record of tax determination; and
    (8) For distilled spirits containing eligible wine or eligible 
flavors, the effective tax rate.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201 Pub. 
L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-297, 55 FR 18065, Apr. 30, 1990, as amended by T.D. ATF-379, 
61 FR 31426, June 20, 1996]

                     Submission of Forms and Reports

Sec. 19.791  Submission of transaction forms.

    Completed copies of transaction forms which must be submitted to the 
regional director (compliance) under the provisions of this part shall 
be submitted by the proprietor no later than the close of business the 
third business day succeeding the day of the transaction as provided by 
this part and by instructions on the individual forms.

(Sec. 807, Pub. L. 97-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.792  Reports.

    (a) Reports required by this section shall be prepared as of the end 
of the applicable reporting period. The original shall be submitted to 
the regional director (compliance) and a copy retained by the 
proprietor.
    (b) Proprietors shall submit the following summary reports of their 
operations:

[[Page 395]]



------------------------------------------------------------------------
                Title                   Form No.      Reporting period
------------------------------------------------------------------------
(1) Production report................     5110.40  Monthly.
(2) Storage report...................     5110.11      Do.
(3) Processing reports--
    (i) Manufacture/bottling.........     5110.28      Do.
    (ii) Denaturation (including          5110.43      Do.
     articles).
------------------------------------------------------------------------

    (c) All reports required by this part shall be prepared and 
submitted to the regional director (compliance) not later than the 15th 
day of the month following the close of the reporting period.

(Approved by the Office of Management and Budget under control number 
1512-0198)

(Sec. 807, Pub. L. 96-39, 98 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23953, June 7, 1985]

       Subpart X--Production of Vinegar by the Vaporizing Process

                            Scope of subpart

Sec. 19.821  Production of vinegar by the vaporizing process.

    The regulations in this subpart relate to the production of vinegar 
by the vaporizing process. The regulations cover requirements governing 
the location, qualification, changes after qualification, construction, 
equipment, plant operations and records of operations at vinegar plants. 
Except where incorporated by reference, the provisions of subpart A 
through W and subpart Y of this part do not apply to vinegar plants 
using the vaporizing process. The following provisions of this part 
shall apply to this subpart: the meaning of terms, Sec. 19.11; other 
businesses, Sec. 19.68; right of entry and examination, Sec. 19.81; 
furnishing facilities and assistance, Sec. 19.86; restrictions as to 
location, Sec. 19.131; registry of stills, Sec. 19.169; and maintenance 
and preservation of records, Sec. 19.723.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, 1391, as amended 
(26 U.S.C. 5501-5505))

                         Qualification Documents

Sec. 19.822  Application.

    Each person, before commencing the business of manufacturing vinegar 
by the vaporizing process shall make written application to the regional 
director (compliance). The application will include:
    (a) The applicant's name and principal business address (including 
the plant address if different from the principal business address);
    (b) Description of the extent of the premises;
    (c) Description of the type of operations to be conducted; and
    (d) Description of the stills including the name and residence of 
the owner, the kind of still, its capacity and the purpose for which it 
was set up.

The applicant shall receive and approved application from the regional 
director (compliance) prior to commencing business.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, (26 U.S.C. 5502))

Sec. 19.823  Changes after original qualification.

    When there is a change in the information recorded in the original 
approved application, the proprietor shall make a written notice of the 
change to the regional director (compliance). The notice will identify 
the change and the effective date of the change.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, (26 U.S.C. 5502))

Sec. 19.824  Notice of permanent discontinuance of business.

    A proprietor who intends to permanently discontinue operations shall 
make written notice to the regional director (compliance). The 
proprietor shall include in the notice a statement of the status of the 
stills.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, (26 U.S.C. 5502))

                       Construction and Equipment

Sec. 19.825  Construction and equipment.

    A proprietor of a vinegar plant shall construct and equip the 
vinegar plant so that--

[[Page 396]]

    (a) The distilled spirits vapors that are separated by the 
vaporizing process from the mash produced by the manufacturer are 
condensed only by introducing them into the water or other liquid used 
in making the vinegar; and
    (b) The distilled spirits produced can be accurately accounted for 
and are secure from unlawful removal from the premises or from 
unauthorized use.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, (26 U.S.C. 5502))

                            Plant Operations

Sec. 19.826  Authorized operations.

    Vinegar manufacturers qualified under this subpart are authorized 
to--
    (a) Produce vinegar only by the vaporizing process; and
    (b) Produce distilled spirits of 30 degrees of proof or less only 
for use in the manufacture of vinegar on the vinegar plant premises.

Sec. 19.827  Conduct of operations.

    Vinegar manufacturers qualified under this subpart may--
    (a) Separate by a vaporizing process the distilled spirits from the 
mash produced by him; and
    (b) Condense the distilled spirits vapors by introducing them into 
the water or other liquid used in making the vinegar.

Sec. 19.828  Removals from the premises.

    No person shall remove from the vinegar plant premises vinegar or 
other fluid or material containing more than 2% alcohol by volume.

                                 Records

Sec. 19.829  Daily records.

    Each manufacturer of vinegar by the vaporizing process shall keep 
accurate and complete daily records of production operations that 
include--
    (a) The kind and quantity of fermenting or distilling materials 
received on the premises;
    (b) The kind and quantity of materials fermented or mashed;
    (c) The proof gallons of distilled spirits produced;
    (d) The proof gallons of distilled spirits used in the manufacture 
of vinegar;
    (e) The wine gallons of vinegar produced; and
    (f) The wine gallons of vinegar removed from the premises.

Separate government records need not be kept as long as commercial 
records contain all the required information.

                    Administrative and Miscellaneous

Sec. 19.830  Application of distilled spirits tax.

    The internal revenue tax must be paid on any distilled spirits 
produced in or removed from the premises of a vinegar plant in violation 
of law or this subpart.

                Subpart Y--Distilled Spirits For Fuel Use

Sec. 19.901  Scope of subpart.

    This subpart implements 26 U.S.C. 5181, which authorizes the 
establishment of distilled spirits plants solely for producing, 
processing and storing, and using or distributing distilled spirits to 
be used exclusively for fuel use. This subpart relates to the 
qualification and operation of such distilled spirits plants. Distilled 
spirits plants established under this subpart are designated as alcohol 
fuel plants.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.902  Waiver for alcohol fuel plants.

    All provisions of subparts A through X of this part and all 
provisions of 26 U.S.C. Chapter 51 are hereby waived except:
    (a) Any provision specifically incorporated by reference in this 
subpart and the cited authority for that provision;
    (b) Any provision requiring the payment of tax;
    (c) Any provisions dealing with penalty, seizure, or forfeiture 
which is applicable to distilled spirits; and
    (d) 26 U.S.C. 5181.

(Sec. 232, Pub. L. 93-224, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.903  Alternate methods or procedures.

    The proprietor, on specific approval by the Director as provided in 
this

[[Page 397]]

paragraph, may use an alternate method or procedure in lieu of a method 
or procedure specifically prescribed in this subpart or subparts A 
through X of this part where the provisions of those subparts have been 
incorporated by reference in this subpart. The Director may approve an 
alternate method or procedure, subject to stated conditions, when he 
finds that--
    (a) Good cause has been shown for the use of the alternate method or 
procedure;
    (b) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure, and affords equivalent security to the revenue; and
    (c) The alternate method or procedure will not be contrary to any 
applicable provision of law, and will not result in an increase in cost 
to the Government or hinder the effective administration of this part. 
No alternate method or procedure relating to the giving of any bond, to 
the assessment, payment or collection of tax, will be authorized under 
this section. Where the proprietor desires to employ an alternate method 
or procedure, he shall submit a written application to do so to the 
regional director (compliance), for transmittal to the Director. The 
application will specifically describe the proposed alternate method or 
procedure, and will set forth the reasons therefor. The proprietor shall 
not employ any alternate method or procedure until the application has 
been approved. The proprietor shall, during the period of authorization 
of an alternate method or procedure, comply with the terms of the 
approved application. Authorization for any alternate method or 
procedure may be withdrawn whenever in the judgment of the Director the 
revenue is jeopardized or the effective administration of this part is 
hindered by the continuation of such authorization. As used in this 
section, alternate methods or procedures include alternate construction 
or equipment. The proprietor shall retain, as part of the records 
available for examination by AFT officers, any application approved by 
the Director under the provisions of this section.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.904  Emergency variations from requirements.

    The regional director (compliance) may approve construction, 
equipment, and methods of operation other than as specified in this 
part, where he finds that an emergency exists and the proposed 
variations from the specified requirements are necessary, and the 
proposed variations--
    (a) Will afford the security and protection to the revenue intended 
by the prescribed specifications;
    (b) Will not hinder the effective administration of this part; and
    (c) Will not be contrary to any applicable provisions of law. 
Variations from requirements granted under this section are conditioned 
on compliance with the procedures, conditions, and limitations with 
respect thereto set forth in the approval of the application. Failure to 
comply in good faith with such procedures, conditions, and limitations 
will automatically terminate the authority for such variations and the 
proprietor thereupon shall fully comply with the prescribed requirements 
of regulations from which the variations were authorized. Authority for 
any variation may be withdrawn whenever in the judgment of the regional 
director (compliance) the revenue is jeopardized or the effective 
administration of this part is hindered by the continuation of such 
variation. Where the proprietor desires to employ such variation, he 
shall submit a written application to do so to the regional director 
(compliance). The application will describe the proposed variations and 
set forth the reasons therefor. Variations will not be employed until 
the application has been approved, except when the emergency requires 
immediate action to correct a situation that is threatening to life or 
property. Such corrective action may then be taken concurrent with the 
filing of the application and notification of the regional director 
(compliance), via telephone. The proprietor shall retain, as part of the 
records available for examination by ATF officers, any application 
approved by the regional director

[[Page 398]]

(compliance) under the provisions of this section.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.905  Taxes.

    Distilled spirits may be withdrawn free of tax from the premises of 
an alcohol fuel plant exclusively for fuel use in accordance with this 
subpart. Payment of tax will be required in the case of diversion of 
spirits to beverage use or other unauthorized dispositions. The 
provisions of subpart C of this part are applicable to distilled spirits 
for fuel use as follows:
    (a) Imposition of tax liability (Secs. 19.21 through 19.25);
    (b) Assessment of tax (Secs. 19.31 and 19.32); and
    (c) Claims for tax (Secs. 19.41 and 19.44).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

[T.D. ATF-207, 50 FR 23682, June 5, 1985]

Sec. 19.906  Special (occupational) tax.

    (a) General rule. A proprietor of an alcohol fuel plant established 
under this subpart shall be subject to a special (occupational) tax as 
prescribed in subpart Ca of this part, and shall hold a separate special 
tax stamp to cover the alcohol fuel operations.
    (b) Exemption for small plants (effective July 1, 1989). On and 
after July 1, 1989, paragraph (a) of this section shall not apply to 
small alcohol fuel plants as defined in Sec. 19.907. If the annual 
production (including receipts) of a small plant exceeds 10,000 proof 
gallons in any calendar year, special tax is due as provided in 
Sec. 19.49(a)(1) for the special tax year (July 1 through June 30) 
commencing during that calendar year, regardless of whether an 
application for change of plant type under Sec. 19.921(a) has been filed 
or approved. If a medium or large plant produces 10,000 or fewer proof 
gallons (including receipts) in any calendar year, the plant shall be 
exempt from special tax under this paragraph, as for a small plant, for 
the special tax year (July 1 through June 30) commencing during that 
calendar year, regardless of whether an application under Sec. 19.921(c) 
has been filed or approved.

(26 U.S.C. 5081)

[T.D. ATF-271, 53 FR 17543, May 17, 1988, as amended by T.D. ATF-285, 53 
FR 12609, Mar. 28, 1989; T.D. ATF-312, 56 FR 31077, July 9, 1991]

                               Definitions

Sec. 19.907  Meaning of terms.

    When used in this subpart, and in forms prescribed under this 
subpart, terms shall have the meaning given in this section. Words in 
the plural form include the singular and vice versa, and words 
indicating the masculine gender include the feminine. The terms 
``includes'' and ``including'' do not exclude things not enumerated 
which are in the same general class.
    Alcohol fuel plant or plant. An establishment qualified under this 
subpart solely for producing, processing and storing, and using or 
distributing distilled spirits to be used exclusively for fuel use.
    Alcohol fuel producer's permit. The document issued pursuant to 26 
U.S.C. 5181 authorizing the person named therein to engage in business 
as an alcohol fuel plant.
    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 subpart.
    Bonded premises. The premises of an alcohol fuel plant where 
distilled spirits are produced, processed and stored, and used or 
distributed. Premises of small alcohol fuel plants, which are exempt 
from bonding under Sec. 19.912(b), shall be treated as bonded premises 
for purposes of this subpart.
    CFR. The Code of Federal Regulations.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Fuel alcohol. Distilled spirits which have been rendered unfit for 
beverage use at an alcohol fuel plant as provided in this subpart.
    Gallon or wine gallon. The liquid measure equivalent to the volume 
of 231 cubic inches.
    Person. An individual, trust, estate, partnership, association, 
company or corporation.

[[Page 399]]

    Proof. The ethyl alcohol content of a liquid at 60 degrees 
Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
    Proof gallon. A gallon of liquid at 60 degrees Fahrenheit which 
contains 50 percent by volume of ethyl alcohol having a specific gravity 
of 0.7939 at 60 degrees Fahrenheit referred to water at 60 degrees 
Fahrenheit as unity, or the alcoholic equivalent thereof.
    Proprietor. The person qualified under this subpart to operate the 
alcohol fuel plant.
    Region. A Bureau of Alcohol, Tobacco and Firearms region.
    Regional director (compliance). The principal regional official 
responsible for administering regulations in this subpart.
    Render unfit for beverage use. The addition to distilled spirits of 
materials which will not impair the quality of the spirits for fuel use 
as prescribed and authorized by the provisions of this subpart.
    Secretary. The Secretary of the Treasury or his delegate.
    Spirits or distilled spirits. That substance known as ethyl alcohol, 
ethanol, or spirits of wine in any form (including all dilutions and 
mixtures thereof from whatever source or by whatever process produced), 
but not fuel alcohol unless specifically stated. For purposes of this 
subpart, the term does not include spirits produced from petroleum, 
natural gas, or coal.
    This chapter. Title 27, Code of Federal Regulations, Chapter I [27 
CFR Chapter I].
    Transfer in bond. The transfer of spirits between alcohol fuel 
plants or the transfer of spirits to or from a distilled spirits plant 
qualified under 26 U.S.C. 5171 and an alcohol fuel plant.
    Type of plant. The following three types of alcohol fuel plants are 
recognized in this subpart:
    (a) Small plant. An alcohol fuel plant which produces (including 
receipts) not more than 10,000 proof gallons of spirits per calendar 
year.
    (b) Medium plant. An alcohol fuel plant which produces (including 
receipts) more than 10,000 and not more than 500,000 proof gallons of 
spirits per calendar year.
    (c) Large plant. An alcohol fuel plant which produces (including 
receipts) more than 500,000 proof gallons of spirits per calendar year.
    U.S.C. The United States Code.

                                 Permits

Sec. 19.910  Application for permit required.

    Any person wishing to establish an alcohol fuel plant shall first 
make application for and obtain an alcohol fuel producer's permit. The 
application for a permit will be on Form 5110.74. The application, in 
duplicate, will be submitted to the regional director (compliance). The 
description of stills on the approved application constitutes 
registration of stills as required by 27 CFR 196.45. Alcohol fuel 
producers' permits are continuing unless automatically terminated under 
Sec. 19.920, suspended or revoked as provided in Sec. 19.950, or 
voluntarily surrendered.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1355, as amended (26 U.S.C. 5179); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.911  Criteria for issuance of permit.

    In general, an alcohol fuel producer's permit will be issued to any 
person who completes the required application for permit and who 
furnishes the required bond (if any). However, the regional director 
(compliance) may institute proceedings for the denial of the 
application, if the regional director (compliance) determines that:
    (a) The applicant (including, in the case of a corporation, any 
officer, director, or principal stockholder, and in the case of a 
partnership, a partner) is, by reason of business experience, financial 
standing, or trade connections, not likely to maintain operations in 
compliance with 26 U.S.C. Chapter 51, or regulations issued thereunder; 
or
    (b) The applicant has failed to disclose any material information 
required, or has made any false statement, as to any material fact, in 
connection with the application; or
    (c) The premises on which the applicant proposes to conduct the 
operations are not adequate to protect the revenue. The procedures 
applicable to

[[Page 400]]

denial of applications are set forth in 27 CFR Part 200.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.912  Small plants.

    Persons wishing to establish a small plant shall apply for a permit 
as provided in this section. Except as provided in paragraph (c) of 
Sec. 19.913, operations may not be commenced until the permit has been 
issued.
    (a) Application for permit. The application (Form 5110.74) shall be 
submitted to the regional director (compliance) and shall set forth the 
following information:
    (1) Name and mailing address of the applicant, and the location of 
the alcohol fuel plant if not apparent from the mailing address;
    (2) A diagram of the plant premises and a statement as to the 
ownership of the premises (if the premises are not owned by the 
proprietor, the owner's consent to access by ATF officers must be 
furnished);
    (3) A description of all stills and a statement of their maximum 
capacity;
    (4) The materials from which spirits will be produced; and
    (5) A description of the security measures to be used to protect 
premises, buildings and equipment where spirits are produced, processed, 
and stored.
    (b) Bond. No bond is required for small plants.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.913  Action on applications to establish small plants.

    (a) Receipt by the regional director (compliance)--(1) Notice of 
receipt. Within 15 days of receipt of the application, the regional 
director (compliance) shall send a written notice of receipt to the 
applicant. The notice will include a statement as to whether the 
application meets the requirements of Sec. 19.912. If the application 
does not meet those requirements, the application will be returned and a 
new 15-day period will commence upon receipt by the regional director 
(compliance) of the amended or corrected application.
    (2) Failure to give notice. If the required notice of receipt is not 
sent, and the applicant has a receipt indicating that the regional 
director (compliance) has received the application, the 45-day period 
provided for in paragraphs (b) and (c) of this section will commence on 
the fifteenth day after the date the regional director (compliance) 
received the application.
    (3) Limitation. The provisions of subparagraphs (1) and (2) of this 
section apply only to:
    (i) The first application submitted with respect to any one small 
plant in any calendar quarter; and
    (ii) An amended or corrected first application.
    (b) Determination by the regional director (compliance). Within 45 
days from the date the regional director (compliance) sent the applicant 
a notice of receipt of a completed application, the regional director 
(compliance) shall either (1) issue the permit, or (2) give notice in 
writting to the applicant, stating in detail the reason that a permit 
will not be issued. Denial of an application will not prejudice any 
further application for a permit made by the same applicant.
    (c) Presumption of approval. If, within 45 days from the date of the 
notice to the applicant of receipt of a completed application, the 
regional director (compliance) has not notified the applicant of 
issuance of the permit or denial of the application, the application 
shall be deemed to have been approved and the applicant may proceed if a 
permit had been issued.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.914  Medium plants.

    Any person wishing to establish a medium plant shall make 
application for and obtain in alcohol fuel producer's permit. Operations 
may not be commenced until the application has been approved and the 
permit issued.
    (a) Application for permit. The application (Form 5110.74) shall be 
submitted to the regional director (compliance) and shall set forth the 
following information:
    (1) The information required by Sec. 19.912 (a);

[[Page 401]]

    (2) Statement of maximum total proof gallons of spirits that will be 
produced and received during a calendar year:
    (3) Information identifying the principal persons involved in the 
business and a statement as to whether the applicant or any such person 
has ever been convicted of a felony or misdemeanor under Federal or 
State law; and,
    (4) Statement of the amount of funds invested in the business and 
the source of those funds.
    (b) Bond. A bond of sufficient penal sum, as prescribed in 
Sec. 19.957, is required. The bond must be submitted on Form 5110.56 and 
approved before a permit may be issued.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.915  Large plants.

    Any person wishing to establish a large plant shall make application 
for and obtain an alcohol fuel producer's permit. Operations may not be 
commenced until the application has been approved and the permit issued.
    (a) Application for permit. The application (Form 5110.74) shall be 
submitted to the regional director (compliance) and shall set forth the 
following information:
    (1) The information required by Sec. 19.912(a);
    (2) Statement of the maximum proof gallons of spirits that will be 
produced and received during a calendar year;
    (3) Information identifying the principal persons involved in the 
business and a statement as to whether the applicant or any such person 
has ever been convicted of a felony or misdemeanor under Federal or 
State law;
    (4) Statement of the amount of funds invested in the business and 
the source of those funds;
    (5) Statement of the type of business organization and of the 
persons interested in the business, supported by the items of 
information listed in Sec. 19.916; and,
    (6) List of the offices, the incumbents of which are authorized by 
the articles of incorporation or the board of directors to act on behalf 
of the proprietor or to sign the proprietor's name.
    (b) Bond. A bond of sufficient penal sum, as prescribed in 
Sec. 19.957, is required. The bond must be submitted on Form 5110.56 and 
approved before a permit may be issued.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.916  Organizational documents.

    The supporting information required by paragraph (a)(5) of 
Sec. 19.915, includes, as applicable, copies of--
    (a) Corporate documents. (1) Corporate charter or certificate of 
corporate existence or incorporation.
    (2) List of officers and directors, showing their names and 
addresses. However, do not list officers and directors who have no 
responsibilities in connection with the operation of the alcohol fuel 
plant.
    (3) Certified extracts or digests of minutes of meetings of board of 
directors, authorizing certain individuals to sign for the corporation.
    (4) Statement showing the number of shares of each class of stock or 
other evidence of ownership, authorized and outstanding, and the voting 
rights of the respective owners or holders.
    (b) Statement of interest. (1) Names and addresses of the 10 persons 
having the largest ownership or other interest in each of the classes of 
stock in the corporation, or other legal entity, and the nature and 
amount of the stockholding or other interest of each, whether the 
interest appears in the name of the interested party or in the name of 
another for him. If a corporation is wholly owned or controlled by 
another corporation, those persons of the parent corporation who meet 
the above standards are considered to be the persons interested in the 
business of the subsidiary, and the names thereof need be furnished only 
upon request of the regional director (compliance).
    (2) In the case of an individual owner or partnership, the name and 
address of each person interested in the plant, whether the interest 
appears in the name of the interested party or in the name of another 
for that person.
    (c) Availability of additional documents. The originals of documents 
required to be submitted under this section and additional items 
required

[[Page 402]]

under Sec. 19.918 such as the articles of incorporation, bylaws, State 
certificate authorizing operations, or articles of partnership or 
association (in the case of a partnership where required by State law) 
shall be made available to any ATF officer upon request.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.917  Powers of attorney.

    The proprietor of a large plant shall execute and file with the 
regional director (compliance) a Form 1534 (5000.8), in accordance with 
instructions on the form, for each person authorized to sign or act on 
behalf of the proprietor (Not required for persons whose authority is 
furnished in the application).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))

Sec. 19.918  Information already on file and supplemental information.

    If any of the information required by Secs. 19.912 through 19.916 is 
on file with the regional director (compliance), that information, if 
accurate and complete, may be incorporated by reference and made a part 
of the application. When required by the regional director (compliance), 
the applicant shall furnish as a part of the application for permit, 
additional information as may be necessary to determine whether the 
application should be approved.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278, (26 U.S.C. 5181))

               Changes Affecting Applications and Permits

Sec. 19.919  Changes affecting applications and permits.

    When there is a change relating to any of the information contained 
in, or considered a part of, the application on Form 5110.74, the 
proprietor shall within 30 days file with the regional director 
(compliance), a written notice, in duplicate, of such change. Where the 
change affects the terms and conditions of the permit the proprietor 
shall within 30 days (except as otherwise provided in this subpart), 
file with the regional director (compliance), in duplicate, an amended 
application on Form 5110.74.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271); sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 
U.S.C. 5181))

Sec. 19.920  Automatic termination of permits.

    (a) Permits not transferable. Permits issued under this subpart 
shall not be transferred. In the event of the lease, sale, or other 
transfer of such a permit, or of the authorized operations, the permit 
automatically terminates.
    (b) Corporations. In the case of a corporation holding a permit 
under this subpart, if actual or legal control of the permittee 
corporation changes, directly or indirectly, whether by reason of change 
in stock ownership or control (in the permittee corporation or in any 
other corporation), by operation of law, or in any other manner, the 
permit may remain in effect until the expiration of 30 days after the 
change, whereupon the permit will automatically terminate. However, if 
operations are to be continued after the change in control, and an 
application for a new permit is filed within 30 days of the change, then 
the outstanding permit may remain in effect until final action is taken 
on the new application. When final action is taken on the application, 
the outstanding permit automatically terminates.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))

Sec. 19.921  Change in type of alcohol fuel plant.

    (a) Small plants. If the proprietor of a small plant wishes to 
increase production (including receipts) to a level in excess of 10,000 
proof gallons of spirits per calendar year, the proprietor shall first 
furnish a bond and obtain an amended permit by filing application under 
Sec. 19.914 or Sec. 19.915, as applicable. Information filed with the 
original application for permit need not be resubmitted, but may be 
incorporated by reference in the new application.
    (b) Medium plants. Where the proprietor of a medium plant intends to 
increase production (including receipts) above 500,000 proof gallons of 
spirits per calendar year, the proprietor shall first

[[Page 403]]

obtain an amended permit by filing an application under Sec. 19.915. A 
new or strengthening bond may be required (see Sec. 19.956). Information 
already on file may be incorporated by reference in the new application.
    (c) Curtailment of activities. Proprietors of large or medium plants 
who have curtailed operations to a level where they are eligible to be 
requalified as medium or small plants may, on approval of a letter of 
application by the regional director (compliance), be relieved from the 
additional requirements incident to their original qualification. In the 
case of a change to small plant status, termination of the bond and 
relief of the surety from further liability shall be as provided in 
subpart H of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.922  Change in name of proprietor.

    Where there is to be a change in the individual, firm, or corporate 
name, the proprietor shall, within 30 days of the change, file an 
application to amend the permit; a new bond or consent of surety is not 
required.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271); sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 
U.S.C. 5181))

Sec. 19.923  Changes in officers, directors, or principal persons.

    Where there is any change in the list of officers, directors, or 
principal persons, furnished under the provisions of Sec. 19.914, 
Sec. 19.915 or Sec. 19.916, the proprietor shall submit, within 30 days 
of any such change, a notice in letter form stating the changes in 
officers, directors, or principal persons. A new list reflecting the 
changes will be submitted with the letter notice.

(Sec. 232, Pub. L. 96-233, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.924  Change in proprietorship.

    (a) General. If there is a change in the proprietorship of a plant 
qualified under this part, the outgoing proprietor shall comply with the 
requirements of Sec. 19.945 and the successor shall, before commencing 
operations, apply for and obtain a permit and file the required bond (if 
any) in the same manner as a person qualifying as the proprietor of a 
new plant.
    (b) Fiduciary. A successor to the proprietorship of a plant who is 
an administrator, executor, receiver, trustee, assignee or other 
fiduciary, shall comply with the applicable provisions of 
Sec. 19.186(b).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))

Sec. 19.925  Continuing partnerships.

    If under the laws of the particular State, the partnership is not 
immediately terminated on death or insolvency of a partner, but 
continues until the winding up of the partnership affairs is completed, 
and the surviving partner has the exclusive right to the control and 
possession of the partnership assets for the purpose of liquidation and 
settlement, the surviving partner may continue to operate the plant 
under the prior qualification of the partnership. However, in the case 
of a large or a medium plant, a consent of surety must be filed, wherein 
the surety and the surviving partner agree to remain liable on the bond. 
If the surviving partner acquires the business on completion of the 
settlement of the partnership, he shall qualify in his own name from the 
date of acquisition, as provided in Sec. 19.924(a). The rule set forth 
in this section will also apply where there is more than one surviving 
partner.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.926  Change in location.

    Where there is a change in the location of the plant or of the area 
included within the plant premises, the proprietor shall file an 
application to amend the permit and, if a bond is required, either a new 
bond or a consent of surety on Form 1533 (5000.18). Operation of the 
plant may not be commenced at the new location prior to issuance of the 
amended permit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271); sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26

[[Page 404]]

U.S.C. 5173); sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

                          Alternate Operations

Sec. 19.930  Alternating proprietorship.

    (a) General. (1) An alcohol fuel plant, or a part thereof, may be 
operated alternately by proprietors if--
    (i) The alcohol fuel plant and the proprietors are otherwise 
qualified under the provisions of this subpart, and
    (ii) The necessary operations bonds (if any) and applications 
covering such operations have been filed with and approved by the 
regional director (compliance).
    (2) Where alternating proprietorship is to be limited to a part of a 
plant, that part must be suitable for qualification as a separate plant.
    (b) Qualifying Documents. Each person desiring to operate an alcohol 
fuel plant as an alternating proprietor shall file with the regional 
director (compliance):
    (1) An application on Form 5110.74 to cover the proposed alternation 
of premises.
    (2) Diagram of premises, in duplicate, showing the arrangement under 
which the premises will be operated. Diagrams will be prepared in 
accordance with paragraph (c) of this section.
    (3) Evidence of existing operations bond (if any), consent of 
surety, or a new operations bond to cover the proposed alternation of 
premises.
    (4) When required by the regional director (compliance), additional 
information as may be necessary to determine whether the application 
should be approved.
    (c) Diagram of premises. Each person filing an application for 
operation of a plant as an alternating proprietor shall submit a diagram 
of the premises. Where operations by alternating proprietors are limited 
to parts of a plant, a diagram which designates the parts of the plant 
that are to be alternated will be submitted. A diagram will be submitted 
for each arrangement under which the premises will be operated. The 
diagram will be in sufficient detail to establish the boundaries of the 
plant or any part thereof which is to be alternated.
    (d) Alternation Journal. Once the applications have been approved 
and initial operations conducted thereunder, the plant, or parts 
thereof, may be alternated. The outgoing and incoming proprietor shall 
enter into an alternation journal the following information:
    (1) Name or trade name;
    (2) Alcohol fuel plant permit number;
    (3) Date and time of alternation; and
    (4) Quantity of spirits transferred in proof gallons.

The alternation journal will remain in the possession of the incoming 
proprietor until the premises are again alternated whereupon it will be 
transferred to the new incoming proprietor.
    (e) Commencement of operations. Except for spirits transferred to 
the incoming proprietor, the outgoing proprietor shall remove all 
spirits from areas, rooms, or buildings to be alternated, prior to the 
effective date and time shown in the alternation journal. Fuel alcohol 
may be either transferred to the incoming proprietor or may be retained 
by the outgoing proprietor in areas, rooms, or buildings to be 
alternated when the areas, rooms, or buildings are secured with locks, 
the keys to which are in the custody of the outgoing proprietor. 
Whenever operation of the areas, rooms, or buildings is to be resumed by 
a proprietor following suspension of operations by an alternating 
proprietor, the outgoing proprietor (except proprietors of small plants) 
must furnish a consent of surety on Form 1533 (5000.18) to continue in 
effect the operations bond covering his operations. This is to be done 
prior to alternating the premises.
    (f) Records. Each proprietor shall maintain separate records and 
submit separate reports. All transfers of spirits will be reflected in 
the records of each proprietor. The quantity of spirits and fuel alcohol 
transferred will be shown in the production and disposition records of 
the outgoing proprietor. The quantity of spirits transferred will be 
shown in the receipt record of the incoming proprietor. Each outgoing 
and incoming proprietor shall include spirits transferred in 
determinations of plant size and bond amounts. The provisions of 
Sec. 19.921 regarding change in type of plant are applicable to each 
proprietor. Entries into these records

[[Page 405]]

will be in the manner prescribed in Secs. 19.982, 19.984, and 19.986.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271; sec. 805(a), Pub. 96-39, 93 Stat. 275 (26 U.S.C. 
5171); sec. 232 Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

                  Permanent Discontinuance of Business

Sec. 19.945  Notice of permanent discontinuance.

    A proprietor who permanently discontinues operations as an alcohol 
fuel plant shall, after completion of the operations, file a letterhead 
notice with the regional director (compliance). The notice shall be 
accompanied--
    (a) By the alcohol fuel producer's permit, and by the proprietor's 
request that such permit be canceled;
    (b) By a written statement disclosing, as applicable, whether (1) 
all spirits (including fuel alcohol) have been lawfully disposed of, and 
(2) any spirits are in transit to the premises; and
    (c) By a report covering the discontinued operations (the report 
shall be marked ``Final Report'').

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271); sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 
U.S.C. 5181))

                   Suspension or Revocation of Permits

Sec. 19.950  Suspension or revocation.

    Whenever the regional director (compliance) has reason to believe 
that any person holding an alcohol fuel producer's permit--
    (a) Has not in good faith complied with the applicable provisions of 
26 U.S.C. Chapter 51, or regulations issued thereunder; or
    (b) Has violated conditions of the permit; or
    (c) Has made any false statements as to any material fact in the 
application therefor; or
    (d) Has failed to disclose any material information required to be 
furnished; or
    (e) Has violated or conspired to violate any law of the United 
States relating to intoxicating liquor or has been convicted of any 
offense under Title 26, U.S.C. punishable as a felony or of any 
conspiracy to commit such offense; or
    (f) Has not engaged in any of the operations authorized by the 
permit for a period of more than 2 years; the regional director 
(compliance) may institute proceedings for the revocation or suspension 
of the permit in accordance with the procedures set forth in 27 CFR part 
200.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))

                                  Bonds

Sec. 19.955  Bonds.

    An operations bond is required for medium and large plants. The bond 
will be executed, in duplicate, on Form 5110.56. Surety bonds may be 
given only with corporate sureties holding certificates of authority 
from, and subject to the limitations prescribed by, the Secretary as set 
forth in the current revision of Treasury Department Circular 570. 
However, in lieu of corporate surety the proprietor may pledge and 
deposit as surety for his bond, securities which are transferable and 
are guaranteed as to both interest and principal by the United States, 
in accordance with the provisions of 31 CFR part 225. The regional 
director (compliance) will not release such securities until liability 
under the bond for which they were pledged has been terminated.

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173); CH. 390, 
Pub. L. 80-280, 61 Stat. 648, 650 (31 U.S.C. 9301, 9303, 9304, 9306); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.956  Amount of bond.

    The penal sum of the bond is based on the total quantity of 
distilled spirits to be produced (including receipts) during a calendar 
year. If the level of production and/or receipts at the plant is to be 
increased, and the bond is not in the maximum penal sum, a new or 
strengthening bond shall be obtained.
    (a) Medium plants. A medium plant which will produce (including 
receipts) between 10,000 and 20,000 proof gallons of spirits per year 
requires a bond in the amount of $2,000. For each additional 10,000 
proof gallons (or fraction thereof), the bond amount is increased

[[Page 406]]

$1,000. The maximum bond for a medium plant is $50,000.
    (b) Large plants. The minimum bond for a large plant is $52,000 
(more than 500,000, but not more than 510,000 proof gallons annual 
production (including receipts)). For each additional 10,000 (or 
fraction) proof gallons, the amount of the bond is increased $2,000. The 
maximum bond for a large plant is $200,000 (more than 1,240,000 proof 
gallons).

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173); sec. 232, 
Pub. L. 96-233, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.957  Instructions to compute bond penal sum.

    (a) Medium plants. To find the required amount of your bond, 
estimate the total proof gallons of spirits to be produced and received 
in a calendar year. The amount of the bond is $1,000 for each 10,000 
proof gallons (or fraction), subject to a minimum of $2,000 and a 
maximum of $50,000. The following table provides some examples:

             Annual Production and Receipts in Proof Gallons
------------------------------------------------------------------------
                                                       But not   Amount
                      More than                         over     of bond
------------------------------------------------------------------------
10,000..............................................    20,000    $2,000
20,000..............................................    30,000     3,000
90,000..............................................   100,000    10,000
190,000.............................................   200,000    20,000
490,000.............................................   500,000    50,000
------------------------------------------------------------------------

    (b) Large plants. To find the required amount of your bond, estimate 
the total proof gallons of spirits to be produced and received in a 
calendar year. The amount of the bond is $50,000 plus $2,000 for each 
10,000 proof gallons (or fraction) over 500,000. The following table 
provides some examples:

             Annual Production and Receipts in Proof Gallons
------------------------------------------------------------------------
                                                      But not    Amount
                     More than                          over     of bond
------------------------------------------------------------------------
500,000............................................    510,000   $52,000
510,000............................................    520,000    54,000
740,000............................................    750,000   100,000
990,000............................................  1,000,000   150,000
1,240,000..........................................  .........   200,000
------------------------------------------------------------------------


(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173; sec. 232, 
Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.958  Conditions of bond.

    The bond shall be conditioned on payment of all taxes (including any 
penalties and interest) imposed by 26 U.S.C. Chapter 51, on compliance 
with all requirements of law and regulations, and on payment of all 
penalties incurred or fines imposed for violations of any such 
provisions.

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173); sec. 232, 
Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.959  Additional provisions with respect to bonds.

    Subpart H of this part contains further provisions applicable to 
bonds which, where not inconsistent with this subpart, are applicable to 
bonds of alcohol fuel plants.

                  Construction, Equipment and Security

Sec. 19.965  Construction and equipment.

    Buildings and enclosures where distilled spirits will be produced, 
processed, or stored shall be constructed and arranged to enable the 
proprietor to maintain security adequate to deter diversion of the 
spirits. Distilling equipment shall be constructed to prevent 
unauthorized removal of spirits, from the point where distilled spirits 
come into existence until production is complete and the quantity of 
spirits has been determined. Tanks and other vessels for containing 
spirits shall be equipped for locking and be constructed to allow for 
determining the quantities of spirits therein.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))

Sec. 19.966  Security.

    Proprietors shall provide security adequate to deter the 
unauthorized removal of spirits. The proprietor shall store spirits 
either in a building, a storage tank, or within an enclosure, which the 
proprietor will keep locked when operations are not being conducted.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178); 
sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5202))

[[Page 407]]

Sec. 19.967  Additional security.

    If the regional director (compliance) finds that security is 
inadequate to deter diversion of the spirits, as may be evidenced by the 
occurrence of break-ins or by diversion of spirits to unauthorized 
purposes, additional security measures may be required. Such additional 
measures may include, but are not limited to, the following:
    (a) The erection of a fence around the plant or the alcohol storage 
facility;
    (b) Flood lights;
    (c) Alarm systems;
    (d) Watchman services; or,
    (e) Locked or barred windows.

The exact additional security requirements would depend on the extent of 
the security problems, the volume of alcohol produced, the risk to tax 
revenue, and safety requirements.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178); 
sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5202))

                               Supervision

Sec. 19.970  Supervision of operations.

    The regional director (compliance) may assign ATF officers to 
premises of plants qualified under this subpart. The authorities of ATF 
officers, provided in Secs. 19.81 through 19.84, and the requirement 
that proprietors furnish facilities and assistance to ATF officers, 
provided in Sec. 19.86, apply to plants qualified under this subpart. 
The provisions of Sec. 19.75 of this part pertaining to the assignment 
of ATF officers and hours of operation, to the extent deemed necessary 
by the regional director (compliance), are applicable to plants 
qualified under this subpart.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended, 1356, as amended, 
1357, as amended, 1358, as amended, 1375, as amended, 1396, as amended 
(26 U.S.C. 5006, 5201, 5203, 5204, 5213, 5555); sec. 806, Pub. L. 96-39, 
93 Stat. 279 (26 U.S.C. 5202); sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 
U.S.C. 5207))

                         Accounting for Spirits

Sec. 19.980  Gauging.

    (a) Equipment and method. Proprietors shall gauge spirits by 
accurately determining the proof and quantity of spirits. The proof of 
the spirits shall be determined using a glass cylinder, hydrometer, and 
thermometer. Proprietors may account for fuel alcohol in wine gallons. 
Unless proprietors desire to do so, it is not necessary to determine the 
proof of fuel alcohol manufactured, on-hand, or removed. The Proprietor 
may determine quantity either by volume or weight. A tank or receptacle 
with a calibrated sight glass installed, a calibrated dipstick, 
conversion charts, meters (subject to approval by the regional director 
(compliance)), or other devices or methods approved by the Director, may 
be used to determine quantity by volume. The proprietor shall ensure 
that hydrometers, thermometers, and other equipment used to determine 
proof, volume, or weight are accurate. From time to time ATF officers 
shall verify the accuracy of such equipment. Detailed procedures for 
gauging spirits are provided in 27 CFR part 30.
    (b) When Required. Proprietors shall guage spirits and record the 
results in their records at the following times:
    (1) On completion of production of distilled spirits;
    (2) On receipt of spirits at the plant;
    (3) Prior to the addition of materials to render the spirits unfit 
for beverage use;
    (4) Before withdrawal from plant premises or other disposition of 
spirits (including fuel alcohol); and
    (5) When spirits are to be inventoried.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1358, as amended 
(26 U.S.C. 5201, 5204))

Sec. 19.981  Inventories.

    Proprietors shall take actual physical inventory of all spirits 
(including fuel alcohol) on bonded premises at least once during each 
period for which a report is required by Sec. 19.988. The results of the 
inventory shall be posted in the applicable records required by 
Sec. 19.982.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

Sec. 19.982  Records.

    (a) All plants. All proprietors shall maintain records with respect 
to: (1) The quantity and proof of spirits produced; (2) The proof 
gallons of spirits

[[Page 408]]

on-hand and received; (3) The quantities and types of materials added to 
render the spirits unfit for beverage use; (4) The quantity of fuel 
alcohol manufactured; and, (5) All dispositions of spirits (including 
fuel alcohol). Fuel alcohol may be recorded in wine gallons.
    (b) Medium and large plants. Proprietors of medium and large plants 
shall also record the kind and quantity of materials used to produce 
spirits.
    (c) General requirements. (1) The records must contain sufficient 
information to allow ATF officers to determine the quantities of spirits 
produced, received, stored, or processed and to verify that all spirits 
have been lawfully disposed of or used.
    (2) Records which the proprietor prepares for other purposes (i.e. 
invoices or other commercial records) may be used to meet the record 
requirements of this subpart, so long as they show the required 
information.
    (3) Where the format or arrangement of the record is such that the 
information is not clearly or accurately reflected, the regional 
director (compliance) may require a format or arrangement which will 
clearly and accurately reflect the information.
    (4) Entries required by this subpart to be made into records will be 
made on the day on which the operation or transaction occurs. However, 
these entries may be deferred until the third business day succeeding 
the day on which the operation or transaction occurs when the proprietor 
prepares commercial records concurrent with the individual operation or 
transaction.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.983  Spirits rendered unfit for beverage use in the production 
          process.

    Where spirits are rendered unfit for beverage use before removal 
from the production system, the proprietor shall enter into the 
production records, in addition to the quantity and proof of spirits 
produced, the kind and quantity of materials added to each lot of 
spirits. In such a case, a separate record under Sec. 19.985 is not 
required. The quantity of spirits produced will be determined by 
substracting the quantity of materials added to render the spirits unfit 
for beverage use from the quantity of fuel alcohol produced and 
multiplying the resulting figure by the proof of each lot of spirits. 
The proprietor shall determine the proof of each lot of spirits. The 
proprietor shall procure a representative sample of each lot, prior to 
the addition of any material for rendering the spirits unfit for 
beverage use, and proof the sample in accordance with the provisions of 
Sec. 19.980(a). This paragraph applies to in-line addition of materials 
and to systems in which, before any spirits come off the production 
equipment, the proprietor adds materials for rendering the spirits unfit 
for beverage use to the first receptacle where spirits are to be 
deposited.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); sec. 232, Pub. 
L. 96-222, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.984  Record of spirits received.

    The proprietor's copy of the consignor's invoice or other document 
received with the shipment, on which the proprietor has noted the date 
of receipt and quantity received, constitutes the required record.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.985  Record of spirits rendered unfit for beverage use.

    The proprietor shall record the kind and quantity of materials added 
to render each lot of spirits unfit for beverage use and the quantity of 
fuel alcohol manufactured (which may be given in wine gallons).

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.986  Record of dispositions.

    (a) Fuel alcohol removed. For fuel alcohol removed from the plant 
premises, the commercial record or other document required by 
Sec. 19.997 constitutes the required record.
    (b) Spirits transferred. For spirits transferred in bond (including 
transfers from small plants) to a distilled spirits plant qualified 
under subpart G of this part or to another alcohol fuel plant,

[[Page 409]]

the commercial invoice or other document required by Secs. 19.508 and 
19.999 constitutes the required record.
    (c) Other dispositions. For spirits or fuel alcohol used or 
otherwise disposed of (e.g., lost, destroyed, redistilled) on the 
premises of the alcohol fuel plant, the proprietor shall maintain a 
record as follows:
    (1) The quantity of spirits (in proof gallons) or fuel alcohol (in 
gallons) and the date of disposition; and,
    (2) The purpose for which used or the nature of the other 
disposition.
    (d) Separate records. Records for dispositions of fuel alcohol and 
spirits will be maintained separately.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); sec. 232, Pub. 
L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.987  Maintenance and retention of records.

    The proprietor shall retain at the plant where an operation or 
transaction occurs the records required by this subpart for a period of 
not less than three years from the date thereof or from the date of the 
last entry made thereon, whichever is later. Whenever any record because 
of its condition becomes unsuitable for its intended or continued use 
the proprietor shall reproduce the record by a process approved by the 
regional director (compliance) under the provisions of Sec. 19.725. The 
records shall be available for inspectin by any ATF officer during 
business hours. For records maintained on data processing equipment, the 
provisions of Sec. 19.723 apply.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

Sec. 19.988  Reports.

    Each proprietor shall submit an annual report of their operations, 
Form 5110.75, for the calendar year ending December 31. The proprietor 
shall submit this report to the regional director (compliance) by 
January 30 following the end of the calendar year.

(Sec. 807, Pub. L. No. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-327, 57 FR 32178, July 21, 1992]

                             Redistillation

Sec. 19.990  Redistillation of spirits or fuel alcohol received on the 
          plant premises.

    (a) Receipts for redistillation. Proprietors of alcohol fuel plants 
may receive and redistill spirits. Fuel alcohol may be received on the 
premises of an alcohol fuel plant for the recovery by redistillation of 
the spirits contained therein. Spirits and fuel alcohol received for 
redistillation will be identified as such and will be kept separate from 
other spirits and fuel alcohol on the premises until redistilled. 
Spirits originally produced by the plant and subsequently recovered by 
redistillation will not be included in determinations of plant size and 
bond amounts. Spirits riginally produced at other plants and 
subsequently recovered by redistillation will be included in 
determinations of plant size and bond amounts.
    (b) Recordkeeping. (1) The proprietor shall record in a separate 
record the following information for spirits and fuel alcohol received 
for redistillation.
    (i) Date received;
    (ii) Whether fuel alcohol or spirits;
    (iii) Quantity received;
    (iv) From whom received;
    (v) Reason for redistillation;
    (vi) Date redistilled; and
    (vii) Quantity of spirits recovered by redistillation.
    (2) The proprietor's commercial record required for spirits by 
Sec. 19.999 or for fuel alcohol by Sec. 19.997 and any other commercial 
record received covering spirits or fuel alcohol to be redistilled will 
be filed separately from other records. These records may be used in 
lieu of the record required by paragraph (b)(1) of this section when any 
missing information required to be shown has been entered upon the 
commercial record by the proprietor.
    (c) Status. Spirits recovered by redistillation will be treated the 
same as spirits which have not been redistilled. All provisions of this 
subpart and 26 U.S.C. Chapter 51 (including liability for tax) 
applicable to spirits when originally produced are applicable to spirits 
recovered by redistillation.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended, 1370, as amended 
(26 U.S.C. 5223,

[[Page 410]]

5243); sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

                     Uses, Withdrawals and Transfers

Sec. 19.995  Use on premises.

    Spirits may be used as a fuel on the premises of the alcohol fuel 
plant at which produced and need not be rendered unfit for beverage use. 
Proprietors using spirits on the plant premises shall keep the 
applicable records concerning such dispositions as provided in 
Sec. 19.986(c).

(Sec. 232, Pub. L. 96-223, 94 Stat. 278, (26 U.S.C. 5181))

Sec. 19.996  Withdrawal of spirits.

    Before spirits may be withdrawn from the premises of an alcohol fuel 
plant, they must be rendered unfit for beverage use as provided in this 
subpart. Spirits rendered unfit for beverage use (fuel alcohol) may be 
withdrawn free of tax from plant premises exclusively for fuel use.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.997  Withdrawal of fuel alcohol.

    For each shipment or other removal of fuel alcohol from the plant 
premises the consignor shall prepare a commercial invoice, sales slip, 
or similar document. The consignor shall enter on the document the date, 
the quantity of fuel alcohol removed, a description of the shipment (for 
example, number and size of containers, tank truck, etc.), and the name 
and address of the consignee. The consignor shall retain a copy of the 
document as a record.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.998  Transfer in bond of spirits.

    (a) Transfer between alcohol fuel plants. A proprietor may remove 
spirits from the bonded premises of an alcohol fuel plant (including the 
premises of a small plant) for transfer in bond to another alcohol fuel 
plant. Bulk conveyances in which spirits are transferred shall be 
secured with locks, seals or other devices as prescribed by Sec. 19.96. 
The spirits need not be rendered unfit for beverage use prior to 
transfer. Spirits so transferred may not be withdrawn, used, sold, or 
otherwise disposed of for other than fuel use.
    (b) Transfer to or from other distilled spirits plants. Spirits (not 
including spirits produced from petroleum, natural gas, or coal) may be 
transferred in bond from distilled spirits plants qualified under 
subpart G of this part to alcohol fuel plants. Alcohol fuel plants may 
transfer spirits in bond to distilled spirits plants qualified under 
subpart G of this part. Bulk conveyances in which spirits are 
transferred shall be secured with locks, seals, or other devices as 
prescribed by Sec. 19.96. The spirits need not be rendered unfit for 
beverage use prior to transfer. Spirits so transferred may not be 
withdrawn, used, sold, or otherwise disposed of for other than fuel use.
    (c) Transfer procedures. The procedures in Secs. 19.999 through 
19.1001 pertain only to the transfer of spirits between alcohol fuel 
plants. The procedures in Secs. 19.506 through 19.509 and 19.770 pertain 
to the transfer of spirits from an alcohol fuel plant to a distilled 
spirits plant qualified under 26 U.S.C. 5171. The alcohol fuel plant 
transferring in bond spirits filled into portable containers to the 
bonded premises of a distilled spirits plant qualified under 26 U.S.C. 
5171 shall mark each container as required by Sec. 19.1008(b). The 
procedures in Secs. 19.508, 19.510 and 19.770 pertain to the transfer of 
spirits from a distilled spirits plant to an alcohol fuel plant.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5212); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.999  Consignor premises.

    The consignor shall prepare, in duplicate, a commerical invoice or 
shipping document to cover each shipment of spirits. The consignor shall 
enter on the document the quantity of spirits transferred, the proof of 
the spirits transferred, a description of the shipment (for example, 
number and size of drums or barrels, tank truck, etc.), the name, 
address, and permit number of the consignor and of the consignee, and 
the serial numbers of seals, locks, or other devices used to secure the 
conveyance. The consignor shall forward the original of the document to 
the

[[Page 411]]

consignee with the shipment and retain the copy as a record.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5212))

Sec. 19.1000  Reconsignment in transit.

    When, prior to or on arrival at the premises of a consignee, spirits 
transferred in bond are found to be unsuitable for the intended purpose, 
were shipped in error, or, for any other bona fide reason, are not 
accepted by such consignee, or are not accepted by a carrier, they may 
be reconsigned, by the consignor, to himself, or to another qualified 
consignee. In such case, the bond, if any, of the proprietor to whom the 
spirits are reconsigned shall cover such spirits while in transit after 
reconsignment. In addition, if the spirits are reconsigned to a 
distilled spirits plant qualified under subpart G of this part, an 
application to receive spirits by transfer in bond (on Form 5100.16) 
must have been previously approved for the consignee. Notice of 
cancellation of the shipment shall be made by the consignor to the 
consignee and the consignor shall note the reconsignemnt on his copy of 
the document covering the original shipment. Where the reconsignment is 
to another proprietor, a new document shall be prepared and prominently 
marked with the word ``Reconsignment''.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, (26 U.S.C. 5212); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.1001  Consignee premises.

    (a) General. When spirits are received by transfer in bond, the 
proprietor shall examine each conveyance to determine whether the locks, 
seals, or other devices are intact upon arrival at his premises. If the 
locks, seals or other devices are not intact, he shall immediately 
notify the area supervisor, before removal of any spirits from the 
conveyance. The consignee shall determine the quantity of spirits 
received and record the quantity and the date received on the document 
received with the shipment. The consignee shall retain the document as 
the record of receipt required by Sec. 19.984.
    (b) Portable containers. When spirits are received in barrels, 
drums, or similar portable containers, the proprietor shall examine each 
container and, unless the transfer was made in a secured conveyance and 
the seals or other devices are intact on arrival, verify the contents of 
each container. The proprietor shall record the quantity received for 
each container on a list, and shall attach a copy of the list to the 
invoice or other document received with the shipment.
    (c) Bulk conveyances and pipelines. When spirits are received in 
bulk conveyances or by pipeline, the consignee shall gauge the spirits 
received and shall record the quantity so determined on the invoice or 
other document received with shipment. However, the regional director 
(compliance) may waive the requirement for gauging spirits on receipt by 
pipeline if, because of the location of the premises, there will be no 
jeopardy to the revenue.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended 
(26 U.S.C. 5204, 5212); sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 
U.S.C. 5181))

Sec. 19.1002  Prohibited uses, transfers, and withdrawals.

    No person shall withdraw, use, sell, or otherwise dispose of 
distilled spirits (including fuel alcohol) produced under this subpart 
for other than fuel use. The law imposes criminal penalties on any 
person who withdraws, uses, sells or otherwise disposes of distilled 
spirits (including fuel alcohol) produced under this subpart for other 
than fuel use.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1398, as amended (26 U.S.C. 5601); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

         Materials for Rendering Spirits Unfit for Beverage Use

Sec. 19.1005  Authorized materials.

    (a) General. The Director shall determine and authorize for use 
materials for rendering spirits unfit for beverage use which will not 
impair the quality of the spirits for fuel use. Spirits treated under 
this section will be considered rendered unfit for beverage use and 
eligible for withdrawal as fuel alcohol.
    (b) List. The Director will compile and issue periodically a list of 
materials authorized for rendering spirits

[[Page 412]]

unfit for beverage use. The list will specify for each material (1) name 
and (2) quantity required to render spirits unfit for beverage use. The 
list may be obtained at no cost upon request from the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.
    (c) Authorized material. Until issuance of the initial list of 
materials authorized for rendering spirits unfit for beverage use, 
proprietors are authorized to add to each 100 gallons of spirits any of 
the following materials in the quantities specified.
    (1) 2 gallons or more of--
    (i) Gasoline or automotive gasoline (for use in engines which 
require unleaded gasoline Environmental Protection Agency and 
manufacturers specifications may require that unleaded gasoline be used 
to render the spirits unfit for beverage use).
    (ii) Kerosene,
    (iii) Deodorized kerosene,
    (iv) Rubber hydrocarbon solvent,
    (v) Methyl isobutyl ketone,
    (vi) Mixed isomers of nitropropane,
    (vii) Heptane, or,
    (viii) Any combination of (i) through (vii); or
    (2) \1/8\ ounce of denatonium benzoate N.F. (Bitrex) and 2 gallons 
of isopropyl alcohol.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-249, 52 
FR 5961, Feb. 27, 1987]

Sec. 19.1006  Other materials.

    If a proprietor desires to use a material not authorized under 
Sec. 19.1005 to render spirits unfit for beverage use, the proprietor 
shall submit an application to the Director. The application must state 
the name of the material and the quantity of material that the 
proprietor proposes to add to each 100 gallons of spirits. The 
proprietor may be required to submit an 8 ounce sample of the material 
with the application. Material that impairs the quality of the spirits 
for fuel use will not be approved. The proprietor shall not use any 
proposed material prior to its approval. Materials approved for use 
under this section will appear in the next subsequent issuance of the 
list of materials authorized for rendering spirits unfit for beverage 
use provided for under Sec. 19.1005. The proprietor shall retain as part 
of the records available for inspection by ATF officers, any application 
approved by the Director under the provisions of this section.

(Sec. 232, Pub. L. 96-233, 94 Stat. 278 (26 U.S.C. 5181))

Sec. 19.1007  Samples.

    A proprietor may take samples of spirits and fuel alcohol for 
testing and analysis. Samples of spirits may not be removed from the 
premises of the alcohol fuel plant. Samples of fuel alcohol may be 
removed from the premises of the alcohol fuel plant to a bona fide 
laboratory for testing and analysis. The proprietor shall indicate on 
sample containers that the spirits or fuel alcohol contained therein is 
a sample. The proprietor shall account for samples in the record 
provided for in Sec. 19.986.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

                                  Marks

Sec. 19.1008  Marks.

    (a) Fuel alcohol. The proprietor shall conspicuously and permanently 
mark or securely label each container of fuel alcohol containing 55 
gallons or less that will be withdrawn from the plant premises, as 
follows:

                                 WARNING

                              FUEL ALCOHOL

                  MAY BE HARMFUL OR FATAL IF SWALLOWED

The mark or label shall be placed on the head or side of the container, 
and shall be in plain legible letters. Proprietors may place other marks 
or labels on containers so long as they do not obscure the required 
mark.
    (b) Spirits. When barrels, drums or similiar portable containers of 
spirits are to be transferred by a proprietor to a distilled spirits 
plant qualified under subpart G of this part, each container will be 
marked or labeled in plain legible letters on the side or head to show 
the following information:
    (1) Quantity in wine gallons;
    (2) Proof;

[[Page 413]]

    (3) Serial number of container;
    (4) Name, address (city or town and State) and permit number of the 
alcohol fuel plant; and
    (5) The words ``Spirits-For Alcohol Fuel Use Only''.

Proprietors may place other marks or labels on such containers so long 
as they do not obscure the required mark. Serial numbers will be 
assigned consecutively commencing with ``1''. When the numbering of any 
series reaches ``1,000,000'', the proprietor may recommence the series. 
The recommenced series will be given an alphabetical prefix or suffix. 
Where there is a change in proprietorship, or in the individual, firm, 
corporate name or trade name, the series in use at the time of the 
change may be continued.

(Sec. 232, Pub. L. 96-233, 94 Stat. 278, (26 U.S.C. 5181); sec. 201, 
Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

                   Subpart Z--Paperwork Reduction Act

Sec. 19.1010  OMB control numbers assigned pursuant to the Paperwork 
          Reduction Act.

    (a) Purpose. This subpart displays the control numbers assigned to 
information collection requirements in this part by the Office of 
Management and Budget pursuant to the Paperwork Reduction Act of 1980, 
Pub. L. 96-511. The Department intends that this subpart comply with the 
requirements of section 3507(f) of the Paperwork Reduction Act, which 
requires that agencies display a current control number assigned by the 
Director of the Office of Management and Budget for each agency 
information collection requirement.
    (b) Display.

------------------------------------------------------------------------
                                                             Current OMB
                 Section where identified                    control No.
------------------------------------------------------------------------
19.21.....................................................     1512-0203
19.34.....................................................     1512-0203
19.35.....................................................     1512-0198
                                                               1512-0203
19.36.....................................................     1512-0203
19.37.....................................................     1512-0203
19.38.....................................................     1512-0203
19.41.....................................................     1512-0141
                                                               1512-0203
19.42.....................................................     1512-0141
                                                               1512-0203
19.43.....................................................     1512-0141
                                                               1512-0203
19.44.....................................................     1512-0141
                                                               1512-0203
19.45.....................................................     1512-0203
19.46.....................................................     1512-0203
19.62.....................................................     1512-0206
19.66.....................................................     1512-0206
19.67.....................................................     1512-0206
19.68.....................................................     1512-0462
19.71.....................................................     1512-0206
19.72.....................................................     1512-0206
19.73.....................................................     1512-0206
19.75.....................................................     1512-0206
19.91.....................................................     1512-0206
                                                               1512-0250
19.92.....................................................     1512-0250
19.93.....................................................     1512-0250
19.96.....................................................     1512-0206
19.98.....................................................     1512-0206
19.99.....................................................     1512-0206
19.133....................................................     1512-0206
19.134....................................................     1512-0206
19.151....................................................     1512-0206
19.152....................................................     1512-0206
19.153....................................................     1512-0206
19.154....................................................     1512-0206
19.155....................................................     1512-0206
19.157....................................................     1512-0195
19.158....................................................     1512-0195
19.159....................................................     1512-0195
19.162....................................................     1512-0195
19.165....................................................     1512-0195
19.166....................................................     1512-0206
19.167....................................................     1512-0206
19.168....................................................     1512-0206
19.170....................................................     1512-0206
19.180....................................................     1512-0206
19.182....................................................     1512-0206
19.183....................................................     1512-0195
19.184....................................................     1512-0206
19.185....................................................     1512-0206
19.186....................................................     1512-0206
19.187....................................................     1512-0206
19.189....................................................     1512-0206
19.190....................................................     1512-0206
19.191....................................................     1512-0206
19.192....................................................     1512-0206
19.193....................................................     1512-0206
19.201....................................................     1512-0202
                                                               1512-0206
19.202....................................................     1512-0202
                                                               1512-0206
19.203....................................................     1512-0202
                                                               1512-0206
19.204....................................................     1512-0202
                                                               1512-0206
19.205....................................................     1512-0202
                                                               1512-0206
19.206....................................................     1512-0206
19.211....................................................     1512-0206
19.249....................................................     1512-0206
19.250....................................................     1512-0206
19.251....................................................     1512-0206
19.273....................................................     1512-0250
19.274....................................................     1512-0460
19.276....................................................     1512-0250
19.277....................................................     1512-0206
19.278....................................................     1512-0460
19.280....................................................     1512-0460
19.281....................................................     1512-0206
19.311....................................................     1512-0202
19.312....................................................     1512-0205
19.314....................................................     1512-0205
19.315....................................................     1512-0205
19.316....................................................     1512-0205

[[Page 414]]


19.318....................................................     1512-0250
19.319....................................................     1512-0250
19.320....................................................     1512-0192
                                                               1512-0250
19.321....................................................     1512-0250
19.322....................................................     1512-0250
19.324....................................................     1512-0204
                                                               1512-0206
19.326....................................................     1512-0205
19.327....................................................     1512-0205
                                                               1512-0461
19.329....................................................     1512-0250
19.342....................................................     1512-0192
                                                               1512-0250
19.343....................................................     1512-0250
19.344....................................................     1512-0192
                                                               1512-0250
19.345....................................................     1512-0461
19.347....................................................     1512-0192
19.349....................................................     1512-0192
19.353....................................................     1512-0250
19.372....................................................     1512-0198
19.373....................................................     1512-0198
19.382....................................................     1512-0206
19.383....................................................     1512-0198
19.384....................................................     1512-0198
19.385....................................................     1512-0461
19.386....................................................     1512-0198
                                                               1512-0461
19.387....................................................     1512-0198
19.388....................................................     1512-0461
19.389....................................................     1512-0198
19.390....................................................     1512-0198
                                                               1512-0250
                                                               1512-0461
19.391....................................................     1512-0198
19.392....................................................     1512-0198
19.393....................................................     1512-0198
19.394....................................................     1512-0189
                                                               1512-0461
19.395....................................................     1512-0461
19.396....................................................     1512-0461
19.397....................................................     1512-0189
                                                               1512-0190
                                                               1512-0199
                                                               1512-0461
19.398....................................................     1512-0189
                                                               1512-0461
19.400....................................................     1512-0198
19.401....................................................     1512-0250
19.402....................................................     1512-0206
                                                               1512-0250
19.451....................................................     1512-0207
19.453....................................................     1512-0207
19.454....................................................     1512-0250
19.456....................................................     1512-0206
19.457....................................................     1512-0207
19.458....................................................     1512-0207
19.460....................................................     1512-0206
19.461....................................................     1512-0206
19.462....................................................     1512-0250
19.463....................................................     1512-0461
19.464....................................................     1512-0250
19.467....................................................     1512-0141
19.471....................................................     1512-0207
                                                               1512-0461
19.483....................................................     1512-0192
19.484....................................................     1512-0250
                                                               1512-0461
19.485....................................................     1512-0461
19.487....................................................     1512-0203
19.501....................................................     1512-0250
19.502....................................................     1512-0250
19.503....................................................     1512-0250
19.505....................................................     1512-0191
                                                               1512-0250
19.508....................................................     1512-0250
                                                               1512-0461
19.509....................................................     1512-0191
                                                               1512-0250
19.510....................................................     1512-0061
                                                               1512-0250
19.515....................................................     1512-0203
19.516....................................................     1512-0203
19.517....................................................     1512-0203
                                                               1512-0250
19.518....................................................     1512-0203
19.519....................................................     1512-0203
19.520....................................................     1512-0203
19.521....................................................     1512-0203
19.522....................................................     1512-0203
19.523....................................................     1512-0203
19.524....................................................     1512-0203
19.525....................................................     1512-0203
19.526....................................................     1512-0203
19.532....................................................     1512-0250
19.533....................................................     1512-0206
19.537....................................................     1512-0067
                                                               1512-0250
19.540....................................................     1512-0067
                                                               1512-0077
                                                               1512-0250
                                                               1512-0461
19.541....................................................     1512-0067
19.561....................................................     1512-0141
19.562....................................................     1512-0141
                                                               1512-0192
                                                               1512-0206
                                                               1512-0250
19.564....................................................     1512-0141
19.565....................................................     1512-0198
                                                               1512-0203
                                                               1512-0250
19.583....................................................     1512-0461
19.587....................................................     1512-0460
19.588....................................................     1512-0460
19.592....................................................     1512-0461
19.593....................................................     1512-0461
19.594....................................................     1512-0461
19.595....................................................     1512-0461
19.596....................................................     1512-0461
19.597....................................................     1512-0206
                                                               1512-0461
19.599....................................................     1512-0461
19.601....................................................     1512-0461
19.602....................................................     1512-0461
19.604....................................................     1512-0461
19.605....................................................     1512-0189
                                                               1512-0461
19.606....................................................     1512-0461
19.607....................................................     1512-0461
19.608....................................................     1512-0461
19.610....................................................     1512-0189
19.611....................................................     1512-0198
19.633....................................................     1512-0092
19.634....................................................     1512-0206
19.635....................................................     1512-0198
19.636....................................................     1512-0198
19.638....................................................     1512-0206
19.639....................................................     1512-0198
19.640....................................................     1512-0091
19.641....................................................     1512-0204
                                                               1512-0461
19.642....................................................     1512-0461
19.643....................................................     1512-0461
19.644....................................................     1512-0461

[[Page 415]]


19.645....................................................     1512-0461
19.646....................................................     1512-0461
19.647....................................................     1512-0461
19.648....................................................     1512-0461
19.649....................................................     1512-0461
19.650....................................................     1512-0461
19.661....................................................     1512-0461
19.662....................................................     1512-0461
19.663....................................................     1512-0206
19.664....................................................     1512-0056
19.666....................................................     1512-0189
19.668....................................................     1512-0189
19.669....................................................     1512-0056
                                                               1512-0189
19.670....................................................     1512-0189
19.671....................................................     1512-0189
19.672....................................................     1512-0189
19.681....................................................     1512-0141
                                                               1512-0203
19.682....................................................     1512-0203
                                                               1512-0250
19.683....................................................     1512-0250
19.684....................................................     1512-0250
19.685....................................................     1512-0067
19.686....................................................     1512-0191
                                                               1512-0250
19.687....................................................     1512-0199
19.688....................................................     1512-0250
19.691....................................................     1512-0250
19.701....................................................     1512-0206
                                                               1512-0250
19.702....................................................     1512-0250
19.703....................................................     1512-0203
19.704....................................................     1512-0461
19.721....................................................     1512-0189
                                                               1512-0192
                                                               1512-0198
                                                               1512-0203
                                                               1512-0205
                                                               1512-0207
                                                               1512-0250
19.723....................................................     1512-0189
                                                               1512-0192
                                                               1512-0198
                                                               1512-0203
                                                               1512-0205
                                                               1512-0207
                                                               1512-0250
                                                               1512-0462
19.724....................................................     1512-0206
19.725....................................................     1512-0206
19.731....................................................     1512-0189
                                                               1512-0192
                                                               1512-0198
                                                               1512-0203
                                                               1512-0205
                                                               1512-0207
                                                               1512-0250
                                                               1512-0189
19.732....................................................     1512-0192
                                                               1512-0198
                                                               1512-0203
                                                               1512-0205
                                                               1512-0207
                                                               1512-0250
19.736....................................................     1512-0205
19.740....................................................     1512-0192
19.741....................................................     1512-0192
19.742....................................................     1512-0192
19.743....................................................     1512-0192
19.747....................................................     1512-0198
19.748....................................................     1512-0198
19.749....................................................     1512-0198
19.750....................................................     1512-0198
19.751....................................................     1512-0198
19.752....................................................     1512-0207
19.753....................................................     1512-0207
19.761....................................................     1512-0203
19.762....................................................     1512-0203
19.763....................................................     1512-0203
19.764....................................................     1512-0203
19.765....................................................     1512-0203
19.766....................................................     1512-0250
19.767....................................................     1512-0250
19.768....................................................     1512-0250
19.769....................................................     1512-0250
19.770....................................................     1512-0215
                                                               1512-0250
19.772....................................................     1512-0189
19.773....................................................     1512-0198
19.774....................................................     1512-0250
19.775....................................................     1512-0250
19.776....................................................     1512-0250
19.778....................................................     1512-0198
19.779....................................................     1512-0067
19.780....................................................     1512-0250
19.791....................................................     1512-0067
                                                               1512-0190
19.792....................................................     1512-0189
                                                               1512-0192
                                                               1512-0198
                                                               1512-0205
                                                               1512-0207
19.821....................................................     1512-0462
19.822....................................................     1512-0462
19.823....................................................     1512-0462
19.824....................................................     1512-0462
19.829....................................................     1512-0462
19.903....................................................     1512-0215
19.904....................................................     1512-0215
19.905....................................................     1512-0141
19.910....................................................     1512-0214
19.912....................................................     1512-0214
19.914....................................................     1512-0214
19.915....................................................     1512-0214
19.916....................................................     1512-0214
19.919....................................................     1512-0215
19.921....................................................     1512-0214
                                                               1512-0215
19.922....................................................     1512-0214
19.923....................................................     1512-0215
19.924....................................................     1512-0214
19.926....................................................     1512-0214
19.930....................................................     1512-0215
19.945....................................................     1512-0215
19.980....................................................     1512-0215
19.981....................................................     1512-0215
19.982....................................................     1512-0215
19.983....................................................     1512-0215
19.984....................................................     1512-0215
19.985....................................................     1512-0215
19.986....................................................     1512-0215
19.987....................................................     1512-0215
19.988....................................................     1512-0215
19.990....................................................     1512-0215
19.995....................................................     1512-0215
19.997....................................................     1512-0215
19.998....................................................     1512-0191
                                                               1512-0215
19.999....................................................     1512-0215
19.1000...................................................     1512-0215
19.1001...................................................     1512-0215
19.1005...................................................     1512-0215
19.1006...................................................     1512-0215
19.1007...................................................     1512-0215
19.1008...................................................     1512-0215
------------------------------------------------------------------------


[[Page 416]]


[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-297, 55 
FR 18065, Apr. 30, 1990]