[Code of Federal Regulations]

[Title 27, Volume 1]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 27CFR24.266]



[Page 625-626]

 

            TITLE 27--ALCOHOL, TOBACCO PRODUCTS AND FIREARMS

 

 CHAPTER I--ALCOHOL AND TOBACCO TAX AND TRADE BUREAU, DEPARTMENT OF THE 

                                TREASURY

 

PART 24_WINE--Table of Contents

 

                        Subpart M_Losses of Wine

 

Sec.  24.266  Inventory losses.



    (a) General. The proprietor shall take a physical inventory of all 

untaxpaid wine on-hand on bonded wine premises as of the close of 

business each tax year, or where a cycle different from the tax year has 

been established as provided in Sec.  24.313, the inventory will be 

taken annually at the end of that cycle, or at any time required by an 

appropriate TTB officer. The physical inventory of bulk and bottled or 

packed wine will be recorded and reported as required by Sec.  24.313.

    (b) Bulk wine losses. The physical inventory of bulk wine will 

determine losses due to spillage, leakage, soakage, evaporation, and 

other losses normally occurring from racking and filtering since the 

previous physical inventory required by this section. A claim for 

allowance of loss, under the provisions of Sec.  24.65, is required for 

inventory losses in production or storage:



[[Page 626]]



    (1) Where there are circumstances indicating that all or a part of 

the wine reported lost was unlawfully removed, or

    (2) Where the loss on bonded wine premises during the annual period 

exceeds three percent of the aggregate volume of wine on-hand at the 

beginning of the annual period and the volume of wine received in bond 

during the annual period; or the loss exceeds six percent of the still 

wine produced by fermentation; or the loss exceeds six percent of the 

sparkling wine produced by fermentation in bottles; or the loss exceeds 

three percent of the special natural wine produced under Sec.  24.195 or 

other wine produced under Sec.  24.218; or the loss exceeds three 

percent of the artificially carbonated wine produced; or the loss 

exceeds three percent of the bulk process sparkling wine produced.



The percentage applicable to each tax class of wine will be calculated 

separately, unless the calculation is impracticable because of the 

mixture of different tax classes by addition of wine spirits or blending 

during the annual period, in which case the percentage will be 

calculated on the aggregate volume. Wine removed immediately after 

production for use as distilling material and on which the usual 

racking, clarifying, and filtering losses are not sustained, will not be 

included in the calculations.

    (c) Bottle and other container wine losses. Wine filled into a 

bottle or other similar containers are not subject to losses due to 

spillage, leakage, soakage, evaporation, and other losses normally 

occurring from racking and filtering. In addition, wine that has been 

filled into a bottle or other similar containers can be accurately 

accounted for and any unexplained shortage is considered evidence of an 

unreported removal. Therefore, the proprietor shall pay the tax on any 

unexplained loss of untaxpaid bottled or packed wine disclosed by 

inventory or otherwise. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as 

amended (26 U.S.C. 5367, 5369, 5370))



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

1512-0492)



[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 

56 FR 31082, July 9, 1991]