Amended 1979
- 1979 Pub. L. 96-39 Pub. L. 96–39, § 807(a)(6)(D), redesignated subsecs. (g) and (h) as (e) and (f), respectively.
Cases: United States v. James H. Smith, Sr., 232 F.2d 570 (3rd Cir. 1956)
(a) Distilled spirits lost or destroyed in bond
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(1) Extent of loss allowance No tax shall be collected in respect of distilled spirits lost or destroyed while in bond, except that such tax shall be collected—
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(A) Theft In the case of loss by theft, unless the Secretary finds that the theft occurred without connivance, collusion, fraud, or negligence on the part of the proprietor of the distilled spirits plant, owner, consignor, consignee, bailee, or carrier, or the employees or agents of any of them;
(B) Voluntary destruction In the case of voluntary destruction, unless such destruction is carried out as provided in subsection (b); and
(C) Unexplained shortage In the case of an unexplained shortage of bottled distilled spirits.
Amended 1979
- 1979 Pub. L. 96-39 Pub. L. 96–39, § 807(a)(6)(A), added subpar. (C).
(2) Proof of loss In any case in which distilled spirits are lost or destroyed, whether by theft or otherwise, the Secretary may require the proprietor of the distilled spirits plant or other person liable for the tax to file a claim for relief from the tax and submit proof as to the cause of such loss. In every case where it appears that the loss was by theft, the burden shall be upon the proprietor of the distilled spirits plant or other person responsible for the distilled spirits tax to establish to the satisfaction of the Secretary that such loss did not occur as the result of connivance, collusion, fraud, or negligence on the part of the proprietor of the distilled spirits plant, owner, consignor, consignee, bailee, or carrier, or the employees or agents of any of them.
(3) Refund of tax In any case where the tax would not be collectible by virtue of paragraph (1), but such tax has been paid, the Secretary shall refund such tax.
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(4) Limitations Except as provided in paragraph (5), no tax shall be abated, remitted, credited, or refunded under this subsection where the loss occurred after the tax was determined (as provided in section 5006(a)). The abatement, remission, credit, or refund of taxes provided for by paragraphs (1) and (3) in the case of loss of distilled spirits by theft shall only be allowed to the extent that the claimant is not indemnified against or recompensed in respect of the tax for such loss.
(5) Applicability The provisions of this subsection shall extend to and apply in respect of distilled spirits lost after the tax was determined and before completion of the physical removal of the distilled spirits from the bonded premises.
Amended 1979
- 1979 Pub. L. 96-39 Pub. L. 96–39, § 807(a)(6)(B), substituted “before” for “prior to the completion” and struck out provisions relating to the applicability of this subsection where the loss occurred after the time prescribed for the withdrawal of the distilled spirits from the bonded premises under section 5006(a)(2) and relating to the applicability of this paragraph to any loss of distilled spirits for which abatement, remission, credit, or refund of tax is allowed under subsec. (c).
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(b) Voluntary destruction The proprietor of the distilled spirits plant or other persons liable for the tax imposed by this chapter or by section 7652 with respect to any distilled spirits in bond may voluntarily destroy such spirits, but only if such destruction is under such supervision and under such regulations as the Secretary may prescribe.
Amended 1971, 1976, 1979
- 1979 Pub. L. 96-39 Pub. L. 96–39, § 807(a)(6)(C), struck out “(1) Distilled spirits in bond” before “The proprietor of” and provisions relating to distilled spirits withdrawn for rectification or bottling.
- 1976 Pub. L. 94-455 Pub. L. 94–455, §§ 1905(a)(2)(A), 1906(b)(13)(A), inserted “or by section 7652” after “tax imposed by this chapter” and struck out “or his delegate” after “Secretary”.
- 1976 Pub. L. 94-455 Pub. L. 94–455, §§ 1905(a)(2)(B), 1906(b)(13)(A), struck out “or his delegate” after “Secretary” and inserted “, or under section 7652” after “under subpart B of this part”.
- 1971 Pub. L. 91-659 Pub. L. 91–659, § 2(a), struck out condition that the distilled spirits can be destroyed only before bottling and permitted destruction after completion of bottling so long as the distilled spirits are on the bottling premises and added taxes imposed under subpart B of this Part as additional taxes which can be claimed for abatement, remission, credit or refund.
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(c) Distilled spirits returned to bonded premises
Amended 1971, 1976, 1979
- 1979 Pub. L. 96-39 Pub. L. 96–39, § 807(a)(6)(C), added subsec. (c). Former subsec. (c), which related to loss of distilled spirits withdrawn from bond for rectification or bottling, was struck out.
- 1976 Pub. L. 94-273 Pub. L. 94–273 substituted “computation year” for “fiscal year” wherever appearing.
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
- 1971 Pub. L. 91-659 Pub. L. 91–659, § 2(b), permits distilled spirits returned to bottling premises to be treated for purposes of the various loss provisions as though they had not been removed from the bottling premises.
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(1) In general Whenever any distilled spirits on which tax has been determined or paid are returned to the bonded premises of a distilled spirits plant under section 5215(a), the Secretary shall abate or (without interest) credit or refund the tax imposed under section 5001(a)(1) (or the tax equal to such tax imposed under section 7652) on the spirits so returned.
Amended 1968, 1971, 1976, 1997
- 1997 Pub. L. 105-34 Pub. L. 105–34 substituted “on which tax has been determined or paid” for “withdrawn from bonded premises on payment or determination of tax”.
- 1976 Pub. L. 94-455 Pub. L. 94–455, §§ 1905(a)(2)(C), 1906(b)(13)(A), struck out “or his delegate” after “Secretary” wherever appearing and inserted “or under section 7652” after “under section 5001(a)(1)”.
- 1971 Pub. L. 91-659 Pub. L. 91–659, § 1, added cl. (iii).
- 1968 Pub. L. 90-630 Pub. L. 90–630 inserted provisions allowing abatement, remission, and refund if the casualty loss occurs after completion of the packaging but before the spirits have been removed from the premises of the distilled spirits plant to which the spirits were removed from bond.
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(2) Claim must be filed within 6 months of return of spirits No allowance under paragraph (1) may be made unless claim therefor is filed within 6 months of the date of the return of the spirits. Such claim may be filed only by the proprietor of the distilled spirits plant to which the spirits were returned, and shall be filed in such form as the Secretary may by regulations prescribe.
Amended 1976
- 1976 Pub. L. 94-273 Pub. L. 94–273 substituted “computation year” for “fiscal year” wherever appearing.
(d) Distilled spirits withdrawn without payment of tax The provisions of subsection (a) shall be applicable to loss of distilled spirits occurring during transportation from bonded premises of a distilled spirits plant to—
Amended 1977, 1979
- 1979 Pub. L. 96-39 Pub. L. 96–39, § 807(a)(6)(D), redesignated subsec. (f) as (d). Former subsec. (d), which related to distilled spirits returned to bonded premises, was struck out.
- 1977 Pub. L. 95-176 Pub. L. 95–176, § 2(f), reenacted par. (1) and substituted heading “General” for “Allowance of tax” and “(or the tax equal to such tax imposed under section 7652)” for “or under section 7652”; added pars. (2) and (3); and redesignated as par. (4) provisions of former par. (2) and inserted reference to allowance of claims under par. (2) or (3).
(1) the port of export, in case of withdrawal under section 5214(a)(4);
Amended 1976
- 1976 Pub. L. 94-455 Pub. L. 94–455, §§ 1905(a)(2)(C), (D), 1906(b)(13)(A), struck out “on or after July 1, 1959,” after “from bonded premises,” and “or his delegate” after “Secretary” and inserted “or under section 7652” after “under section 5001(a)(1)”.
(2) the customs manufacturing bonded warehouse, in case of withdrawal under section 5214(a)(6);
Amended 1965
- 1965 Pub. L. 89-44 Pub. L. 89–44 struck out final clause prohibiting the allowance of a claim in respect to any distilled spirits withdrawn from bonded premises of a distilled spirits plant more than 6 months prior to the date of such return.
(3) the vessel or aircraft, in case of withdrawal under section 5214(a)(7);
(4) the foreign-trade zone, in case of withdrawal under section 5214(a)(8); and
(5) the customs bonded warehouse in the case of withdrawal under sections 5066 and 5214(a)(9).
The provisions of subsection (a) shall be applicable to loss of distilled spirits withdrawn from bonded premises without payment of tax under section 5214(a)(10) for certain research, development, or testing, until such distilled spirits are used as provided by law.
(e) Other laws applicable All provisions of law, including penalties, applicable in respect of the internal revenue tax on distilled spirits, shall, insofar as applicable and not inconsistent with subsection (c), be applicable to the credits or refunds provided for under such subsection to the same extent as if such credits or refunds constituted credits or refunds of such tax.
Amended 1979
- 1979 Pub. L. 96-39 Pub. L. 96–39, § 807(a)(6)(D), (E), redesignated subsec. (g) as (e) and substituted “subsection (c)” for “subsections (b)(2), (c), and (d)” and “under such subsection” for “under such subsections”. Former subsec. (e), which related to samples of distilled spirits used for analysis or testing by United States, was struck out.
(f) Cross reference For provisions relating to allowance for loss in case of wine spirits withdrawn for use in wine production, see section 5373(b)(3).
Amended 1977, 1979
- 1979 Pub. L. 96-39 Pub. L. 96–39, § 807(a)(6)(D), redesignated subsec. (h) as (f). Former subsec. (f) redesignated (d).
- 1977 Pub. L. 95-176 Pub. L. 95–176, § 4(e), added par. (5).