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As the question of excessive leakage depends largely on the circumstances under which the loss occurs, no fixed rule can be established in such cases. In view, however, of the allowance for loss provided in section 50, act of August 28, 1894, and the amendatory act of March 3, 1899, any loss ascertained upon a regauge of a cask or package of a capacity of 40 or more wine gallons after the expiration of sixty-four months from date of original gauge, which exceeds 20 proof gallons or any loss found by such regauge of any cask or package of a capacity of less than 40 gallons which exceeds 12 proof gallons, will be regarded as excessive, and collectors will in all such cases immediately collect the tax due on the original contents of such cask or package less only the allowance authorized by law.

When a regauge is made of packages before the expiration of sixtyfour months from the date of the original gauge, and the loss is found to be 50 per cent or more in excess of the minimum allowed by law for the time which has elapsed since the date of the original gauge, and is in excess of 10 proof gallons as to packages of a capacity of not less than 40 gallons, or of 6 proof gallons as to packages of less capacity than 40 gallons, the collector will at once report the fact, with all the circumstances and conditions surrounding the case, to the Commissioner of Internal Revenue.

The collector will also report to the Commissioner when the losses are smaller than those above specified where the condition of the warehouse, or the cooperage of the packages in the warehouse, is such as indicates a want of proper care on the part of the distiller in preventing unnecessary loss or wantage; or where the loss is of such extent as will materially affect the tax security afforded by the lien imposed by section 3251, Revised Statutes.


G. W. WILSON, Commissioner.

Correct weighing and reporting of packages of distilled spirits by gauging officers at distilleries.

[Int. Rev. Circular No. 558.]



Washington, D. C., March 20, 1900.

To collectors of internal revenue and internal-revenue agents:

Reports received at this office disclose the fact that in some instances gaugers and storekeeper-gaugers, assigned to duty at distilleries where the weighing system is employed in determining the contents of casks and packages, are ignoring the regulations by disregarding the half pound in weighing them for the tare and gross weight of the packages. Attention is called to the fact that where packages are correctly

weighed and reported about one-half of them will show half pounds and the remainder even pounds, and where reports reach this office or goods are found upon the market showing uniformly even pounds, it indicates one of two things, either that the gauger has resolved all fractions in favor of the distiller or that he has done so for the purpose of simplifying his calculations in making up his reports.

This practice wherever indulged in must be discontinued at once, and the correct tare and gross and net weight in pounds and half pounds ascertained and marked upon the packages and so reported on Form 59, as required by regulations.

Any gauger or storekeeper-gauger hereafter found disregarding these regulations will be promptly suspended upon the charge of dereliction of duty, and, if found guilty of the charge, recommended for dismissal from the Service.


G. W. WILSON, Commissioner.

Preparation of distillers' annual notices and bonds.


Washington, D. C., April 4, 1900.

To collectors of internal revenue:

You are instructed that it will be necessary for distillers who desire to continue business after the 30th instant to give new notices and execute new bonds. These papers should be prepared and submitted a sufficient time in advance of the 1st of May to enable you to approve the bonds on that day. In no case should a bond intended for the new year be approved before May 1.

You will call attention to appropriate portions of the regulations and give such directions as will facilitate the correct preparation and execution of these annual notices and bonds, and when received in your office they should be carefully and critically examined before they are approved and copies forwarded to this office.

The fact should not be overlooked that collectors are empowered to refuse to approve distillers' bonds in certain cases.

Where distilleries are under suspension and so continue on and after the date of the approval of the new bonds, notices of continued suspension, bearing even date with the approval of the bonds, must be filed. Your attention is also called to office letter dated April 4, 1899, relative to distillers' annual notices and bonds.

G. W. WILSON, Commissioner.


Spirits lost by casualty.

Loss of spirits from leakage through wormholes not a casualty.



Washington, D. C., April 5, 1900.

SIR The claim of Terry & Blankenship, of Elk Valley, for the refunding of $50.16 paid as stamp tax on spirits alleged to have been lost by casualty, having been submitted to the honorable the Secretary of the Treasury for his action under section 3221, Revised Statutes, has been returned by him disallowed.

The loss is alleged to have resulted from leakage through wormholes. This is not a casualty as defined by the honorable the Secretary of the Treasury in his letter of May 25, 1894, published in Internal Revenue Record, volume 40, page 173.

Please notify the claimants of the rejection of the claim.


G. W. WILSON, Commissioner. Mr. A. J. TYLER, Collector Second District, Knoxville, Tenn.


Collection of tax on fruit brandy.

[Circular No. 99.-Int. Rev. No. 575.]



To collectors of internal revenue:

Washington, D. C., June 26, 1900.

In order to secure a close and effective supervision of the operations of fruit distilleries, collectors are instructed to give prompt attention to all notices and bonds, that distillers may suffer no delay in beginning work, nor have pretext for commencing work before they are notified of the approval of their papers.

The notices and bonds must be given on Forms 27 and 30, revised June 26, 1896, and should be carefully scrutinized to see that they are prepared and executed in strict compliance with regulations and the instructions printed thereon. The former must give the location of the distillery with particularity and certainty, and contain a particular description of the room or building on the distillery premises to be used as a designated place of deposit of the brandy produced.

In the bonds the location of the distillery must be correctly and accurately given. If the distillery is located in a village, town, or city, the blank should be filled out as printed, but if otherwise, the distillery should be described as near the nearest village, town, or city, or postoffice.

It has been found that in some cases the actual owners and operators of a distillery have procured some person to give the notice and bond who is in no way interested in the operation of the distillery. The deputy collector who takes the notice and bond should at the time of taking the same satisfy himself that the person tendering the notice and bond is the sole owner and proprietor and the only person interested in the distillery. An additional statement should also be made on the affidavit Form 33 that the surety is in no way interested in the distillery, or in the operation or products thereof, and that he believes that the principal on the bond is the real owner and proprietor.

Record No. 25 must be written up daily to show all the transactions, opposite the appropriate dates, as to materials purchased or received, operations, and sales or removals of brandy, the latter to be made even though the sales or removals are made after the close of operations at the distillery. The hour of commencing work, when boiling is by furnace heat, is the hour of lighting the fire, and when boiling is by steam the hour when the steam is applied; and the hour of closing work in either case is the hour when brandy or singlings cease to run; and the time must be so entered on the record.

Distillers should be notified that they are required to make a return to the collector in duplicate on Form 15 on or before the 10th day of each month, and that they will be expected to pay the tax on, or to warehouse, the product of each month; and that all singlings must be doubled and ready for gauging by or before the end of the month; otherwise singlings will be liable to be taxed as brandy.

Collectors will, before the commencement of operations for the season, direct the deputy collectors to make a thorough canvass of the fruit distilleries in their respective divisions, with instructions that they take an accurate account of all fruit brandy either at the distillery or at the distiller's place of business, as wholesale or retail liquor dealer, if he carries on either business. Form 183 may be adapted for the purpose of this inventory, and a report thereon should be made to the collector in duplicate, who will file one in his office and forward one to the revenue agent in charge of the division. Each package should be fully described, with its location and original and actual contents.

When making this canvass deputy collectors will also ascertain whether or not the distiller has in his possession any stamps for fruit brandy issued to him or to any other distiller, and note the fact on the report, with a description of the stamps, if any are found.

Collectors will also instruct their deputies when making this canvass to ascertain whether the distillers have been supplied with copies of supplement No. 1, to series 7, No. 7, revised February 19, 1895, and if not, to deliver a copy to each distiller who has not been supplied, taking his receipt therefor on Form 163, which will be forwarded to the collector. Collectors will also direct the officer who visits the distillery to make the final gauge of brandy after the close of operations, to make a careful

examination of the distillers' records, and ascertain and report on Form 192 whether the distiller has distilled all the materials received by him during the season, and if any has been destroyed, or any remains on hand at the time of the final examination, to note the kind and quantity, and, if on hand, its condition and the reason why it has not been distilled.

To effect a frequent visitation of distilleries, collectors will, when necessary, lay off their districts into suitable divisions, and arrange for a force of competent officers sufficient to thoroughly effect the purpose of maintaining such a supervision of these distilleries as shall afford the distiller every facility for compliance with the law and shall limit the opportunities for its envasion. The visits should be at least four in number in each month during the period of active operations, each successive visit to be made, so far as practicable, by a different officer, and not less than two of the visits to be made by a gauger, who shall gauge all ungauged brandy found at the distillery, and in season to facilitate the distiller's monthly report.

Gaugers should not be employed in this service until the distilleries have actually begun operations.

Form 192, revised, will be used for reporting these visits, and the statements therein should be made with care and particularity, and in accordance with the instructions printed upon the form; as also should be the inventory of all the brandy upon the premises, which must be made upon Form 59 by the first visiting officer.

The first visiting officer will ascertain the cubic contents of each fermenter, and mark or cut thereon a serial number, beginning with number one, and cubic contents, and these capacities should be verified from time to time by other officers.

The officer who nexts visits the distillery, after any additional fermenters have been brought on the premises, will ascertain the cubic contents of each of such additional fermenters and mark on each its serial number and cubic contents.

The reports on Form 192 should, immediately upon their receipt by the collector and revenue agent, be examined, and if errors or omissions are found in the statement they should be returned to the officers who made the examination for correction.

To facilitate the comparisons between Forms 192 and the distillers' returns if collectors so desire, they may adopt a blank book for the entry of the essential facts reported.

When pomace or other materials for any reason become unfit for distillation and the distiller desires to destroy the same, the collector will, upon his application, direct the deputy to visit the distillery, whenever practicable, and if he finds the materials unfit for use he will have the same destroyed under his supervision and note the fact on the distiller's record, and also certify thereto on Form 192.

In like manner, when leakage of cider is claimed the visiting officer

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