§5370 — Title 26 Internal Revenue Code | U.S. Code

Summary

No tax must be paid for wine that is lost or destroyed while kept in bonded storage, except in two situations. Tax will be charged if the wine was stolen, unless the Secretary finds the theft happened without any help, trickery, fraud, or carelessness by the owner, the bonded keeper, shippers, carriers, or their workers. Tax will also be charged for wine that was willingly destroyed, unless it was done under government supervision or after the Secretary was properly told and approved it. The Secretary can require the bonded keeper or the person liable for the tax to file a claim and show proof of why the loss happened. If the loss was by theft, the keeper or other responsible person must prove to the Secretary that no one connected to them helped, tricked, cheated, or was negligent.

Title 26, §5370

Internal Revenue Code — Source: USLM XML via OLRC

(a)No tax shall be collected in respect of any wines lost or destroyed while in bond, except that tax shall be collected—

(1)In the case of loss by theft, unless the Secretary shall find that the theft occurred without connivance, collusion, fraud, or negligence on the part of the proprietor or other person responsible for the tax, or the owner, consignor, consignee, bailee, or carrier, or the agents or employees of any of them; and

(2)In the case of voluntary destruction, unless the wine was destroyed under Government supervision, or on such adequate notice to, and approval by, the Secretary as regulations shall provide.

(b)In any case in which the wine is lost or destroyed, whether by theft or otherwise, the Secretary may require by regulations the proprietor of the bonded wine cellar 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 on the proprietor or other person liable for the 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, owner, consignor, consignee, bailee, or carrier, or the agents or employees of any of them.

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 5370, act Aug. 16, 1954, ch. 736, 68A Stat. 666, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1976—Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.

§5370 Losses