Internal Revenue Code:Sec. 5008. Abatement, remission, refund, and allowance for loss or destruction of distilled spirits
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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. 5008. Abatement, remission, refund, and allowance for loss or
destruction of distilled spirits
(a) Distilled spirits lost or destroyed in bond
(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 -
(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.
(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.
(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.
(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.
(c) Distilled spirits returned to bonded premises
(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.
(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.
(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 -
(1) the port of export, in case of withdrawal under section
5214(a)(4);
(2) the customs manufacturing bonded warehouse, in case of
withdrawal under section 5214(a)(6);
(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.
(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).
Sources
(Added Pub. L. 85-859, title II, Sec. 201, Sept. 2, 1958, 72 Stat.
1323; amended Pub. L. 89-44, title VIII, Sec. 805(a), June 21,
1965, 79 Stat. 160; Pub. L. 90-630, Sec. 1, Oct. 22, 1968, 82 Stat.
1328; Pub. L. 91-659, Sec. 1, 2(a), (b), Jan. 8, 1971, 84 Stat.
1964; Pub. L. 94-273, Sec. 47, Apr. 21, 1976, 90 Stat. 382; Pub. L.
94-455, title XIX, Sec. 1905(a)(2), 1906(b)(13)(A), Oct. 4, 1976,
90 Stat. 1818, 1834; Pub. L. 95-176, Sec. 2(f), 4(e), Nov. 14,
1977, 91 Stat. 1364, 1366; Pub. L. 96-39, title VIII, Sec.
807(a)(6), July 26, 1979, 93 Stat. 281; Pub. L. 105-34, title XIV,
Sec. 1411(a), Aug. 5, 1997, 111 Stat. 1046.)
Miscellaneous
PRIOR PROVISIONS
A prior section 5008, act Aug. 16, 1954, ch. 736, 68A Stat. 602,
consisted of provisions similar to those comprising this section,
prior to the general revision of this chapter by Pub. L. 85-859.
See sections 5205(a), (g) and 5604(a)(1) of this title.
Provisions similar to those comprising subsecs. (a)(1) to (4) and
(f)(1), (2) of this section were contained in prior sections
5011(a)(1) to (4), 5023, 5247(e) and 5522(b), act Aug. 16, 1954,
ch. 736, 68A Stat. 604, 606, 648, 679, prior to the general
revision of this chapter by Pub. L. 85-859.
AMENDMENTS
1997 - Subsec. (c)(1). Pub. L. 105-34 substituted ''on which tax
has been determined or paid'' for ''withdrawn from bonded premises
on payment or determination of tax''.
1979 - Subsec. (a)(1)(C). Pub. L. 96-39, Sec. 807(a)(6)(A), added
subpar. (C).
Subsec. (a)(5). Pub. L. 96-39, Sec. 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).
Subsec. (b). Pub. L. 96-39, Sec. 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.
Subsec. (c). Pub. L. 96-39, Sec. 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.
Subsec. (d). Pub. L. 96-39, Sec. 807(a)(6)(D), redesignated
subsec. (f) as (d). Former subsec. (d), which related to distilled
spirits returned to bonded premises, was struck out.
Subsec. (e). Pub. L. 96-39, Sec. 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.
Subsec. (f). Pub. L. 96-39, Sec. 807(a)(6)(D), redesignated
subsec. (h) as (f). Former subsec. (f) redesignated (d).
Subsecs. (g), (h). Pub. L. 96-39, Sec. 807(a)(6)(D), redesignated
subsecs. (g) and (h) as (e) and (f), respectively.
1977 - Subsec. (d). Pub. L. 95-176, Sec. 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).
Subsec. (f)(5). Pub. L. 95-176, Sec. 4(e), added par. (5).
1976 - Subsec. (b)(1). Pub. L. 94-455, Sec. 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''.
Subsec. (b)(2). Pub. L. 94-455, Sec. 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''.
Subsec. (c)(1). Pub. L. 94-455, Sec. 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)''.
Subsec. (c)(2), (3). Pub. L. 94-273 substituted ''computation
year'' for ''fiscal year'' wherever appearing.
Subsec. (c)(5). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out
''or his delegate'' after ''Secretary''.
Subsec. (d)(1). Pub. L. 94-455, Sec. 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)''.
1971 - Subsec. (b)(2). Pub. L. 91-659, Sec. 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.
Subsec. (c)(1)(A). Pub. L. 91-659, Sec. 1, added cl. (iii).
Subsec. (c)(5). Pub. L. 91-659, Sec. 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.
1968 - Subsec. (c)(1). 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.
1965 - Subsec. (d)(2). 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.
EFFECTIVE DATE OF 1997 AMENDMENT
Section 1411(b) of Pub. L. 105-34 provided that: ''The amendment
made by subsection (a) (amending this section) shall take effect on
the 1st day of the 1st calendar quarter that begins at least 180
days after the date of the enactment of this Act (Aug. 5, 1997).''
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.
EFFECTIVE DATE OF 1977 AMENDMENT
Amendment by Pub. L. 95-176 effective on first day of first
calendar month beginning more than 90 days after Nov. 14, 1977, see
section 7 of Pub. L. 95-176, set out as a note under section 5003
of this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1905(a)(2) of Pub. L. 94-455 effective on
first day of first month which begins more than 90 days after Oct.
4, 1976, see section 1905(d) of Pub. L. 94-455, set out as a note
under section 5005 of this title.
EFFECTIVE DATE OF 1971 AMENDMENT
Amendment by Pub. L. 91-659 effective on first day of first
calendar month which begins more than 90 days after Jan. 8, 1971,
see section 6 of Pub. L. 91-659, set out as an Effective Date note
under section 5066 of this title.
EFFECTIVE DATE OF 1968 AMENDMENT
Section 4 of Pub. L. 90-630 provided that:
''(a) For purposes of subsection (b), the effective date of this
Act is the first day of the first calendar month which begins more
than 90 days after the date of the enactment of this Act (Oct. 22,
1968).
''(b) The amendments made by the first section of this Act
(amending this section) shall apply only to losses sustained on or
after such effective date. The amendments made by section 2
(amending section 5062 of this title and section 1313 of Title 19,
Customs Duties) shall apply only to articles exported on or after
such effective date. The amendments made by section 3 (amending
section 5232 of this title) shall apply only to withdrawals from
customs custody on or after such effective date.''
EFFECTIVE DATE OF 1965 AMENDMENT
Section 805(g)(1) of Pub. L. 89-44 provided that: ''The
amendments made by subsections (a), (c), (e), and (f)(6) (amending
this section and sections 5062, 5215, and 5608 of this title) shall
take effect on July 1, 1965.''
DISTILLED SPIRITS RETURNED TO BONDED PREMISES OF DISTILLED SPIRITS
PLANT DURING 1980
Subsec. (c)(1) of this section to be treated as including a
reference to section 5041 of this title with respect to distilled
spirits returned to the bonded premises of distilled spirits plants
during 1980, see section 808(d) of Pub. L. 96-39, set out as a note
under section 5061 of this title.
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 5003, 5005, 5006, 5215,
5373 of this title.
