Internal Revenue Code:Sec. 5006. Determination of tax

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Location in Internal Revenue Code

     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle E - Alcohol, Tobacco, and Certain Other Excise Taxes
       CHAPTER 51 - DISTILLED SPIRITS, WINES, AND BEER
        Subchapter A - Gallonage and Occupational Taxes
         PART I - GALLONAGE TAXES
          Subpart A - Distilled Spirits
        

Statute

    Sec. 5006. Determination of tax
 
    (a) Requirements
      (1) In general
        Except as otherwise provided in this section, the tax on
      distilled spirits shall be determined when the spirits are
      withdrawn from bond.  Such tax shall be determined by such means
      as the Secretary shall by regulations prescribe, and with the use
      of such devices and apparatus (including but not limited to tanks
      and pipelines) as the Secretary may require.  The tax on
      distilled spirits withdrawn from the bonded premises of a
      distilled spirits plant shall be determined upon completion of
      the gauge for determination of tax and before withdrawal from
      bonded premises, under such regulations as the Secretary shall
      prescribe.
      (2) Distilled spirits not accounted for
        If the Secretary finds that the distiller has not accounted for
      all the distilled spirits produced by him, he shall, from all the
      evidence he can obtain, determine what quantity of distilled
      spirits was actually produced by such distiller, and an
      assessment shall be made for the difference between the quantity
      reported and the quantity shown to have been actually produced at
      the rate of tax imposed by law for every proof gallon.
    (b) Taxable loss
      (1) On original quantity
        Where there is evidence satisfactory to the Secretary that
      there has been any loss of distilled spirits from any cask or
      other package deposited on bonded premises, other than a loss
      which by reason of section 5008(a) is not taxable, the Secretary
      may require the withdrawal from bonded premises of such distilled
      spirits, and direct the officer designated by him to collect the
      tax accrued on the original quantity of distilled spirits entered
      for deposit on bonded premises in such cask or package; except
      that, under regulations prescribed by the Secretary, when 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 Secretary an allowance of the tax on the loss
      so established may be credited against the tax on the original
      quantity.  If such tax is not paid on demand it shall be assessed
      and collected as other taxes are assessed and collected.
      (2) Alternative method
        Where there is evidence satisfactory to the Secretary that
      there has been access, other than is authorized by law, to the
      contents of casks or packages stored 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 Secretary (in lieu of
      requiring the casks or packages to which such access has been had
      to be withdrawn and tax paid on the original quantity of
      distilled spirits entered for deposit on bonded premises in such
      casks or packages as provided in paragraph (1)) may assess an
      amount equal to the tax on 5 proof gallons of distilled spirits
      at the prevailing rate on each of the total number of such casks
      or packages as determined by him.
      (3) Application of subsection
        The provisions of this subsection shall apply to distilled
      spirits which are filled into casks or packages, as authorized by
      law, after entry and deposit on bonded premises, whether by
      recasking, filling from storage tanks, consolidation of packages,
      or otherwise; and the quantity filled into such casks or packages
      shall be deemed to be the original quantity for the purpose of
      this subsection, in the case of loss from such casks or packages.
    (c) Distilled spirits not bonded
      (1) General
        The tax on any distilled spirits, removed from the place where
      they were distilled and (except as otherwise provided by law) not
      deposited in storage on bonded premises of a distilled spirits
      plant, shall, at any time within the period of limitation
      provided in section 6501, when knowledge of such fact is obtained
      by the Secretary, be assessed on the distiller of such distilled
      spirits (or other person liable for the tax) and payment of such
      tax immediately demanded and, on the neglect or refusal of
      payment, the Secretary shall proceed to collect the same by
      distraint.  This paragraph shall not exclude any other remedy or
      proceeding provided by law.
      (2) Production at other than qualified plants
        Except as otherwise provided by law, the tax on any distilled
      spirits produced in the United States at any place other than a
      qualified distilled spirits plant shall be due and payable
      immediately upon production.
    (d) Unlawfully imported distilled spirits
      Distilled spirits smuggled or brought into the United States
    unlawfully shall, for purposes of this chapter, be held to be
    imported into the United States, and the internal revenue tax shall
    be due and payable at the time of such importation.
    (e) Cross reference
          For provisions relating to removal of distilled spirits from
        bonded premises on determination of tax, see section 5213.
 

Sources

    (Added Pub. L. 85-859, title II, Sec. 201, Sept. 2, 1958, 72 Stat.
    1320; amended Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A), Oct.
    4, 1976, 90 Stat. 1834; Pub. L. 96-39, title VIII, Sec. 804(a),
    807(a)(4), July 26, 1979, 93 Stat. 274, 280.)
 

Miscellaneous

                              PRIOR PROVISIONS
      A prior section 5006, acts Aug. 16, 1954, ch. 736, 68A Stat. 599;
    Sept. 2, 1958, Pub. L. 85-859, title II, Sec. 206(a), 72 Stat.
    1431, consisted of provisions similar to those comprising this
    section, prior to the general revision of this chapter by Pub. L.
    85-859.
      Provisions similar to those comprising subsecs. (a)(2)(A), (3) of
    this section were contained in prior sections 5007(e)(1) and
    5232(a), act Aug. 16, 1954, ch. 736, 68A Stat. 600, 643, prior to
    the general revision of this chapter by Pub. L. 85-859.
                                 AMENDMENTS
      1979 - Subsec. (a)(1). Pub. L. 96-39, Sec. 804(a), struck out
    ''internal revenue'' after ''provided in this section, the'' and
    ''storage, gauging, and bottling'' after ''but not limited to''.
      Subsec. (a)(2), (3). Pub. L. 96-39, Sec. 804(a), redesignated
    par. (3) as (2). Former par. (2), relating to distilled spirits
    entered for storage, was struck out.
      Subsec. (b)(1). Pub. L. 96-39, Sec. 807(a)(4)(A), (B),
    substituted ''on bonded premises'' for ''in storage in internal
    revenue bond'' in two places and ''; except'' for '',
    notwithstanding that the time specified in any bond given for the
    withdrawal of the spirits entered in storage in such cask or
    package has not expired, except''.
      Subsec. (b)(2), (3). Pub. L. 96-39, Sec. 807(a)(4)(B),
    substituted ''on bonded premises'' for ''in storage in internal
    revenue bond''.
      1976 - Subsecs. (a) to (c). Pub. L. 94-455 struck out ''or his
    delegate'' after ''Secretary''.
                      EFFECTIVE DATE OF 1979 AMENDMENT
      Amendment by Pub. L. 96-39 effective Jan. 1, 1980, see section
    810 of Pub. L. 96-39, set out as a note under section 5001 of this
    title.
              APPLICATION OF 1972 AMENDMENTS TO PRIOR SECTIONS
      Section 206(f) of Pub. L. 85-859, as amended by Pub. L. 99-514,
    Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided:
      ''(1) The amendments made by this section (amending this section
    and sections 5005, 5232, 5242, and 5243 of this title) shall apply
    with respect to:
        ''(A) distilled spirits which on the date of the enactment of
      this Act (Sept. 2, 1958) are in internal revenue bonded
      warehouses or are in transit to or between such warehouses, and
      in respect of which the 8-year bonding period has not expired
      before the date of enactment of this Act; and
        ''(B) distilled spirits which after the date of the enactment
      of this Act (Sept. 2, 1958) are entered for deposit in an
      internal revenue bonded warehouse.
      ''(2) If the 8 years from the date of original entry of any
    distilled spirits for deposit in internal revenue bonded warehouses
    expires at any time during the 10-day period which begins on the
    date of the enactment of this Act (Sept. 2, 1958), the amendments
    made by this section shall apply with respect to such spirits if
    (and only if) before the close of such 10-day period there is filed
    with the Secretary of the Treasury or his delegate either -
        ''(A) a consent of surety which changes (for periods on and
      after the date of the enactment of this Act) the condition based
      on the withdrawal of spirits from the internal revenue bonded
      warehouse within 8 years from the date of original entry for
      deposit to a condition based on the withdrawal of spirits from
      the internal revenue bonded warehouse within 20 years from the
      date of original entry for deposit, or
        ''(B) a bond which applies to periods on and after the date of
      the enactment of this Act and which satisfies the requirements of
      the Internal Revenue Code of 1986 (formerly I.R.C. 1954), as
      amended by this section, and is conditioned on the withdrawal of
      spirits from the internal revenue bonded warehouse within 20
      years from the date of original entry for deposit.''
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 5007, 5008, 5010, 5061,
    6207 of this title.