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

Summary

No tax is collected on wine that is lost or destroyed while still in bond, with two exceptions. If the wine was stolen, the tax is still due unless the Secretary finds the theft happened without any connivance, collusion, fraud, or negligence by the people responsible for the wine or the tax. If the wine was destroyed on purpose, the tax is due unless the destruction happened under government supervision or with proper notice to and approval by the Secretary. The wine cellar proprietor or other person liable for the tax may be required to file a claim and prove how the loss happened; for theft, the burden is on them to show no wrongdoing or negligence was involved.

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