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Title 26, Internal Revenue CodeRelease 119-110

§5551 General Provisions Relating to Bonds

Title 26 › Subtitle E — Alcohol, Tobacco, and Certain Other Excise Taxes › CHAPTER 51 — DISTILLED SPIRITS, WINES, AND BEER › Subchapter I — Miscellaneous General Provisions › § 5551

Last updated Sep 22, 2026|Official source

Summary

People and businesses cannot start or keep working as a distiller, warehouseman, processor, brewer, or winemaker unless the bonds the law requires are approved by the Secretary of the Treasury or an officer the Secretary names, except as explained below. The Secretary or that officer can reject a bond if the person or company giving the bond, or anyone who owns, controls, or runs it, was previously convicted in a court of fraud or illegal tax/customs behavior tied to distilled spirits, wine, or beer, or was convicted of a felony for making, selling, importing, or moving intoxicating liquor. If a designee rejects a bond, the bond-giver can appeal to the Secretary or an officer the Secretary names to hear appeals, and that decision is final. When subparagraph (A) of section 5061(d)(4) applies to a taxpayer (after applying subparagraph (B)), that taxpayer does not have to give bonds for operations or withdrawals of distilled spirits or wines for nonindustrial use or of beer, and is treated as if a sufficient bond had been provided for purposes of this chapter.

Full Legal Text

Title 26, §5551

Internal Revenue Code, Source: USLM XML via OLRC

(a)Approval as condition to commencing business
Except as provided under subsection (d), no individual, firm, partnership, corporation, or association, intending to commence or to continue the business of a distiller, warehouseman, processor, brewer, or winemaker, shall commence or continue the business of a distiller, warehouseman, processor, brewer, or winemaker until all bonds in respect of such a business, required by any provision of law, have been approved by the Secretary of the Treasury or the officer designated by him.
(b)Disapproval
The Secretary of the Treasury or any officer designated by him may disapprove any such bond or bonds if the individual, firm, partnership, or corporation, or association giving such bond or bonds, or owning, controlling, or actively participating in the management of the business of the individual, firm, partnership, corporation, or association giving such bond or bonds, shall have been previously convicted, in a court of competent jurisdiction, of— (1)
(2)any felony under a law of any State, or the District of Columbia, or the United States, prohibiting the manufacture, sale, importation, or transportation of distilled spirits, wine, beer, or other intoxicating liquor.
(c)Appeal from disapproval
In case the disapproval is by an officer designated by the Secretary of the Treasury to approve or disapprove such bonds, the individual, firm, partnership, corporation, or association giving the bond may appeal from such disapproval to the Secretary of the Treasury or an officer designated by him to hear such appeals, and the disapproval of the bond by the Secretary of the Treasury or officer designated to hear such appeals shall be final.
(d)Removal of bond requirements
(1)In general
During any period to which subparagraph (A) of section 5061(d)(4) applies to a taxpayer (determined after application of subparagraph (B) thereof), such taxpayer shall not be required to furnish any bond covering operations or withdrawals of distilled spirits or wines for nonindustrial use or of beer.
(2)Satisfaction of bond requirements
Any taxpayer for any period described in paragraph (1) shall be treated as if sufficient bond has been furnished for purposes of covering operations and withdrawals of distilled spirits or wines for nonindustrial use or of beer for purposes of any requirements relating to bonds under this chapter.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 5551, act Aug. 16, 1954, ch. 736, 68A Stat. 680, 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 subsec. (c) of this section were contained in prior section 5177(c), act Aug. 16, 1954, ch. 736, 68A Stat. 630, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

2015—Subsec. (a). Pub. L. 114–113, § 332(b)(1)(A), substituted “Except as provided under subsection (d), no individual” for “No individual”. Subsec. (d). Pub. L. 114–113, § 332(b)(1)(B), added subsec. (d). 1979—Subsec. (a). Pub. L. 96–39 substituted “warehouseman, processor” for “bonded warehouseman, rectifier” in two places. 1976—Subsec. (a). Pub. L. 94–455, § 1906(b)(13)(B), substituted “Secretary of the Treasury” for “Secretary”. Subsec. (b). Pub. L. 94–455, §§ 1905(c)(5), 1906(b)(13)(B), substituted “Secretary of the Treasury” for “Secretary” in provisions preceding par. (1) and struck out “Territory, or” after “State,” in par. (2). Subsec. (c). Pub. L. 94–455, § 1906(b)(13)(B), substituted “Secretary of the Treasury” for “Secretary”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2015 AmendmentAmendment by Pub. L. 114–113 applicable to any calendar quarters beginning more than 1 year after Dec. 18, 2015, see section 332(c) of Pub. L. 114–113, set out as a note under section 5061 of this title.

Effective Date

of 1979 AmendmentAmendment 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 1976 AmendmentAmendment by section 1905(c)(5) 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

Section effective July 1, 1959, see section 210(a)(1) of Pub. L. 85–859, set out as a note under section 5001 of this title.

Reference

Citations & Metadata

Citation

26 U.S.C. § 5551

Title 26, Internal Revenue Code

Last Updated

Sep 22, 2026

Release point: 119-110