1949 - Internal Revenue Service

46 REPORT OF COMMISSIONER OF INTERNAL REVENUE REPORT OF COMMISSIONER OF INTERNAL REVENUE 47
Federal Alcohol Administration Act, and enforcement activities are
contained in the Appendix.
Administrative procedure.—During the year continued improvements
were made in administrative procedure relating to operations,
transactions, and inspection of plants and permittees.
The following Treasury decisions amending regulations were
prepared by the Unit:
Procedure pertaining to firearms, under the Federal Firearms Act.
(T. D. 5646.)
Procedure for the tax-payment, stamping, etc., of imported fermented
malt liquor pursuant to the Act of June 30, 1948. (T. D.
5647.)
Procedure for the refunding of tax on fermented malt liquors lost
in brewers' bottling houses pursuant to the Act of July 3, 1948 (Public
Law 899, 80th Cong.). (T. D. 5648.)
Procedure for the removal for exportation of distilling apparatus
from the premises of manufacturers or vendors without payment of
the commodity tax. (T. D. 5651.)
Procedure to establish losses of tax-paid liquors in transit from
Puerto Rico to the United States in order to effectuate proper
tax-payment, or proper refund of taxes if claim for refund is made.
(T. D. 5652.)
Simplification and improvement of the procedure relating .to the
production, removal, bottling, storage, and exportation of fermented
malt liquor. (T. D. 5654.)
Requirements relating to the construction of containers for packaging
bottled-in-bond spirits and spirits intended for export with
benefit of drawback. (T. Ds. 5655 and 5656.)
Procedure relating to (1) the establishment and operations of
distilleries, fruit distilleries, rectifying plants, tax-paid bottling
plants, and internal revenue bonded warehouses, (2) the bottling of
distilled spirits in bond, and (3) the gauging of distilled spirits. (T. Ds.
5663, 5664, 5668, 5669, 5671, 5681, 5700, 5701, 5702, and 5705.)
Procedure relating to drawback of tax on distilled spirits and wines.
(T. D. 5691.)
Procedure concerning wholesale and retail dealers in liquors.
(T. D. 5693.)
Tax rates applicable to imported liqueurs, cordials, and similar
compounds, flavored wines, and other compounds and preparations.
(T. D. 5694.)
Procedure concerning accounting of red strip stamps by proprietors
of tax-paid bottling plants and rectifying plants. (T. Ds. 5703 and
5704.)
Procedure for the tax-payment of alcoholic beverages in Puerto
Rico after withdrawal for rectification or bottling, in order to make
stocks available for shipment to the United States, under the Puerto
Rican law, as amended. (T. D. 5706.)
Procedure for labeling and advertising of distilled spirits with
respect to the labeling of Scotch, Irish, and Canadian whiskies and
types thereof, and to other matters, and prescribing a standard of
identity for Vodka and for other purposes. (T. D. 5707.)
Regulations 20, "Wholesale and Retail Dealers in Liquors," and
Regulations 29, "Drawback of Tax on Distilled Spirits Used in the
Manufacture of Nonbeverage Products," were reprinted to incorporate
amendments.
An Inspector's Manual prepared under the direction of the Field
Inspection Division was issued to inspectors throughout the Unit as
an additional aid in conducting inspections of plants and permittees.
The chief of the Procedure Division, as chairman of the cash
awards program, directed the program for the Alcohol Tax Unit.
During the year a total of 1,156 suggestions were reviewed and closed,
of which 189 were adopted. The Procedure Division was responsible
for putting adopted suggestions into effect, including the necessary
revision of regulations, forms, and administrative procedure.
BASIC PERMIT AND TRADE PRACTICE ACTIVITIES
Permits.—The Federal Alcohol Administration Act requires that all
producers (other than brewers), importers, and wholesalers of alcoholic
beverages secure basic permits. The number of outstanding basic
permits of all classes in effect June 30, 1949, totaled 18,858 as compared
with 18,912 in effect at the end of the previous year. There is
included, in the Appendix, a table reflecting permit activity under
the Federal Alcohol Administration Act during the year and the
number of permits of each class in effect June 30, 1949.
Labels.—The Federal Alcohol Administration Act provides that no
person engaged in business as a bottler or importer shall bottle, or
remove from customs custody for consumption, any distilled spirits,
wine, or malt beverages, unless he has obtained and has in his possesslog
a certificate of label approval or certificate of exemption from
label approval covering the labels affixed to the bottled products.
During the year 32,191 applications were received, a slight decline
from the previous year's total of 33,945 applications. A table is
included in the Appendix showing the volume of work handled in
this field during the fiscal year.
As a result of hearings held in San Francisco and Washington, the
distilled spirits labeling regulations were amended in several respects.
The most important changes were with respect to the creation of higher
standards for rye and bourbon liqueurs and domestically produced
blended Scotch type whisky; the elimination of existing standards for
blended Irish type whisky; the establishment of standards of identity
for Vodka; and the requirement of a disclosure, on labels of domestic
blends, of the presence of whiskies of foreign origin.
Advertising.—For the purpose of determining compliance with the
advertising provisions of the Federal Alcohol Administration Act and
regulations issued thereunder, 146,611 alcoholic beverage advertisements,
appeasing in 29,559 publications were reviewed during the
year. Regulatory action of a corrective nature was taken in 1,754
cases where minor technical irregularities were observed. Radio
continuities numbering 12,100 and 2,610 pieces of point-of-sale advertising
material were also reviewed. Seven cases involving more
serious irregularities were closed upon acceptance of substantial
offers in compromise. As a service to the industry and to prevent the
dissemination of improper advertisements, the Bureau reviewed and
commented upon 1,796 advertisements or advertising campaigns prior
to publication: