PRIA, Government Policy, Made Personal

Summary

No tax is due on wines lost or destroyed while kept in bond, except in two situations. Tax is collected if the wine was stolen, unless the Secretary finds the theft happened without connivance, collusion, fraud, or negligence by the proprietor, owner, consignor, consignee, bailee, carrier, or their agents or employees. Tax is also collected for voluntary destruction unless the wine was destroyed under Government supervision or with adequate notice to and approval by the Secretary under the regulations. The Secretary may require the cellar operator or other person responsible for the tax to file a claim and give proof of the loss. If the loss was by theft, that person must convince the Secretary that the theft was not caused by connivance, collusion, fraud, or negligence by any of the listed parties.

Title 26, §5370

Internal Revenue Code, Source: USLM XML via OLRC

(a)General

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

(1)Theft

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)Voluntary destruction

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)Proof of loss

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