26 U.S.C. § 5112 — Registration and regulation

Page 3176 TITLE 26—INTERNAL REVENUE CODE § 5111 5111 to 5114, respectively, and struck out ‘‘and rate of tax’’ after ‘‘Eligibility’’ in item 5111. 1997—Pub. L. 105–34, title XIV, § 1415(b)(3), Aug. 5, 1997, 111 Stat. 1047, struck out item 5115 ‘‘Sign required on premises’’. § 5111. Eligibility Any person using distilled spirits on which the tax has been determined, in the manufacture or production of medicines, medicinal prepara- tions, food products, flavors, flavoring extracts, or perfume, which are unfit for beverage pur- poses shall be eligible for drawback at the time when such distilled spirits are used in the manu- facture of such products as provided for in this subpart. (Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1345, § 5131; amended Pub. L. 94–455, title XIX, § 1905(a)(11), Oct. 4, 1976, 90 Stat. 1819; Pub. L. 100–203, title X, § 10512(d), Dec. 22, 1987, 101 Stat. 1330–448; Pub. L. 103–465, title I, § 136(b), Dec. 8, 1994, 108 Stat. 4841; renumbered § 5111 and amended Pub. L. 109–59, title XI, § 11125(a)(2), (b)(3)(A), (C), Aug. 10, 2005, 119 Stat. 1953, 1954.) Editorial Notes PRIOR PROVISIONS A prior section 5111, added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1340; amended Pub. L. 94–455, title XIX, § 1905(b)(3)(B), Oct. 4, 1976, 90 Stat. 1822; Pub. L. 100–203, title X, § 10512(b), Dec. 22, 1987, 101 Stat. 1330–448, related to tax on wholesale dealers in liquors or beer, prior to repeal by Pub. L. 109–59, title XI, § 11125(a)(1)(C), (c), Aug. 10, 2005, 119 Stat. 1953, 1957, ef- fective July 1, 2008, but inapplicable to taxes imposed for periods before such date. Another prior section 5111, act Aug. 16, 1954, ch. 736, 68A Stat. 618, related to tax on wholesale and retail dealers in liquors or beer, prior to the general revision of this chapter by Pub. L. 85–859. AMENDMENTS 2005—Pub. L. 109–59, § 11125(b)(3)(C), struck out ‘‘and rate of tax’’ after ‘‘Eligibility’’ in section catchline, struck out ‘‘(a) Eligibility for drawback’’ before ‘‘Any person’’, and struck out subsec. (b). Text read as fol- lows: ‘‘The special tax imposed by subsection (a) shall be $500 per year.’’ Pub. L. 109–59, § 11125(b)(3)(A), renumbered section 5131 of this title as this section. Subsec. (a). Pub. L. 109–59, § 11125(a)(2), struck out ‘‘, on payment of a special tax per annum,’’ after ‘‘bev- erage purposes’’. 1994—Subsec. (a). Pub. L. 103–465 substituted ‘‘fla- voring extracts, or perfume’’ for ‘‘or flavoring ex- tracts’’. 1987—Subsec. (b). Pub. L. 100–203 amended subsec. (b) generally. Prior to amendment, subsec. (b) read as fol- lows: ‘‘The special tax imposed by subsection (a) shall be graduated in amount as follows: (1) for total annual use not exceeding 25 proof gallons, $25 a year; (2) for total annual use not exceeding 50 proof gallons, $50 a year; (3) for total annual use of more than 50 proof gal- lons, $100 a year.’’ 1976—Subsec. (a). Pub. L. 94–455 struck out ‘‘produced in a domestic registered distillery or industrial alcohol plant and withdrawn from bond, or using distilled spir- its withdrawn from the bonded premises of a distilled spirits plant,’’ after ‘‘Any person using distilled spir- its’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109–59 effective July 1, 2008, but inapplicable to taxes imposed for periods before such date, see section 11125(c) of Pub. L. 109–59, set out as a note under section 5002 of this title. EFFECTIVE DATE OF 1994 AMENDMENT Amendment by Pub. L. 103–465 effective Jan. 1, 1995, see section 136(d) of Pub. L. 103–465, set out as a note under section 5001 of this title. EFFECTIVE DATE OF 1987 AMENDMENT Pub. L. 100–203, title X, § 10512(h), Dec. 22, 1987, 101 Stat. 1330–450, provided that: ‘‘(1) IN GENERAL.—The amendments made by this sec- tion [enacting sections 5081, 5276, and 5731 of this title and amending this section and sections 5091, 5121, 5131, 5691, and 5801 of this title] shall take effect on January 1, 1988. ‘‘(2) ALL TAXPAYERS TREATED AS COMMENCING IN BUSI- NESS ON JANUARY 1, 1988.— ‘‘(A) IN GENERAL.—Any person engaged on January 1, 1988, in any trade or business which is subject to an occupational tax shall be treated for purposes of such tax as having 1st engaged in such trade or business on such date. ‘‘(B) LIMITATION ON AMOUNT OF TAX.—In the case of a taxpayer who paid an occupational tax in respect of any premises for any taxable period which began be- fore January 1, 1988, and includes such date, the amount of the occupational tax imposed by reason of subparagraph (A) in respect of such premises shall not exceed an amount equal to 1⁄2 the excess (if any) of— ‘‘(i) the rate of such tax as in effect on January 1, 1988, over ‘‘(ii) the rate of such tax as in effect on December 31, 1987. ‘‘(C) OCCUPATIONAL TAX.—For purposes of this para- graph, the term ‘occupational tax’ means any tax im- posed under part II of subchapter A of chapter 51, sec- tion 5276, section 5731, or section 5801 of the Internal Revenue Code of 1986 (as amended by this section). ‘‘(D) DUE DATE OF TAX.—The amount of any tax re- quired to be paid by reason of this paragraph shall be due on April 1, 1988.’’ EFFECTIVE DATE OF 1976 AMENDMENT Amendment by 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. § 5112. Registration and regulation Every person claiming drawback under this subpart shall register annually with the Sec- retary; keep such books and records as may be necessary to establish the fact that distilled spirits received by him and on which the tax has been determined were used in the manufacture or production of medicines, medicinal prepara- tions, food products, flavors, flavoring extracts, or perfume, which were unfit for use for bev- erage purposes; and be subject to such rules and regulations in relation thereto as the Secretary shall prescribe to secure the Treasury against frauds. (Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1345, § 5132; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 103–465, title I, § 136(b), Dec. 8, 1994, 108 Stat. 4841; renumbered § 5112, Pub. L. 109–59, title XI, § 11125(b)(3)(A), Aug. 10, 2005, 119 Stat. 1953.) Page 3177 TITLE 26—INTERNAL REVENUE CODE § 5114 Editorial Notes PRIOR PROVISIONS A prior section 5112, added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1340, defined ‘‘dealer’’, ‘‘wholesale dealer in liquors’’, and ‘‘wholesale dealer in beer’’, prior to repeal by Pub. L. 109–59, title XI, § 11125(a)(1)(C), (c), Aug. 10, 2005, 119 Stat. 1953, 1957, ef- fective July 1, 2008, but inapplicable to taxes imposed for periods before such date. Another prior section 5112, act Aug. 16, 1954, ch. 736, 68A Stat. 618, contained definitions of wholesale deal- ers, prior to the general revision of this chapter by Pub. L. 85–859. AMENDMENTS 2005—Pub. L. 109–59 renumbered section 5132 of this title as this section. 1994—Pub. L. 103–465 substituted ‘‘flavoring extracts, or perfume’’ for ‘‘or flavoring extracts’’. 1976—Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wherever appearing. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1994 AMENDMENT Amendment by Pub. L. 103–465 effective Jan. 1, 1995, see section 136(d) of Pub. L. 103–465, set out as a note under section 5001 of this title. § 5113. Investigation of claims For the purpose of ascertaining the correct- ness of any claim filed under this subpart, the Secretary is authorized to examine any books, papers, records, or memoranda bearing upon the matters required to be alleged in the claim, to require the attendance of the person filing the claim or of any officer or employee of such per- son or the attendance of any other person hav- ing knowledge in the premises, to take testi- mony with reference to any matter covered by the claim, and to administer oaths to any person giving such testimony. (Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1346, § 5133; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; re- numbered § 5113, Pub. L. 109–59, title XI, § 11125(b)(3)(A), Aug. 10, 2005, 119 Stat. 1953.) Editorial Notes PRIOR PROVISIONS A prior section 5113, added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1340; amended Pub. L. 87–863, § 4(b), Oct. 23, 1962, 76 Stat. 1142; Pub. L. 94–455, title XIX, §§ 1905(a)(7), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1819, 1834; Pub. L. 100–647, title II, § 2004(t)(2), (4), Nov. 10, 1988, 102 Stat. 3609, 3610, related to exemptions from tax, prior to repeal by Pub. L. 109–59, title XI, § 11125(a)(1)(C), (c), Aug. 10, 2005, 119 Stat. 1953, 1957, ef- fective July 1, 2008, but inapplicable to taxes imposed for periods before such date. Another prior section 5113, act Aug. 16, 1954, ch. 736, 68A Stat. 619, related to exemptions from tax, prior to the general revision of this chapter by Pub. L. 85–859. AMENDMENTS 2005—Pub. L. 109–59 renumbered section 5133 of this title as this section. 1976—Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’. § 5114. Drawback (a) Rate of drawback In the case of distilled spirits on which the tax has been paid or determined, and which have been used as provided in this subpart, a draw- back shall be allowed on each proof gallon at a rate of $1 less than the rate at which the dis- tilled spirits tax has been paid or determined. (b) Claims Such drawback shall be due and payable quar- terly upon filing of a proper claim with the Sec- retary; except that, where any person entitled to such drawback shall elect in writing to file monthly claims therefor, such drawback shall be due and payable monthly upon filing of a proper claim with the Secretary. The Secretary may require persons electing to file monthly draw- back claims to file with him a bond or other se- curity in such amount and with such conditions as he shall by regulations prescribe. Any such election may be revoked on filing of notice thereof with the Secretary. No claim under this subpart shall be allowed unless filed with the Secretary within the 6 months next succeeding the quarter in which the distilled spirits covered by the claim were used as provided in this sub- part. (c) Allowance of drawback even where certain requirements not met (1) In general No claim for drawback under this section shall be denied in the case of a failure to com- ply with any requirement imposed under this subpart or any rule or regulation issued there- under upon the claimant’s establishing to the satisfaction of the Secretary that distilled spirits on which the tax has been paid or de- termined were in fact used in the manufacture or production of medicines, medicinal prepara- tions, food products, flavors, flavoring ex- tracts, or perfume, which were unfit for bev- erage purposes. (2) Penalty (A) In general In the case of a failure to comply with any requirement imposed under this subpart or any rule or regulation issued thereunder, the claimant shall be liable for a penalty of $1,000 for each failure to comply unless it is shown that the failure to comply was due to reasonable cause. (B) Penalty may not exceed amount of claim The aggregate amount of the penalties im- posed under subparagraph (A) for failures de- scribed in paragraph (1) in respect of any claim shall not exceed the amount of such claim (determined without regard to sub- paragraph (A)). (3) Penalty treated as tax The penalty imposed by paragraph (2) shall be assessed, collected, and paid in the same manner as taxes, as provided in section 6665(a). (Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1346, § 5134; amended Pub. L. 90–615, § 2(a), Oct. 21, 1968, 82 Stat. 1210; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 98–369, div. A, title IV, § 452, July 18, 1984, 98 Stat. 819; Pub. L. 103–465, title I, § 136(b), Dec. 8, 1994, 108 Stat. 4841; Pub. L. 104–188, title I, § 1704(t)(12), Aug. 20, 1996, 110 Stat. 1888; renum- bered § 5114, Pub. L. 109–59, title XI, § 11125(b)(3)(A), Aug. 10, 2005, 119 Stat. 1953.)