klattig

Processing form Line 13 & 29

7 posts in this topic

We're a small operation, making just a 100 or so pf gals per month so far.  I'm still working to understand the monthly DSP reports (no, we don't use a packaged software - can't afford it yet!).  Can someone help me understand the differences between the entries we should be making in Part I vs Part II of the Processing form? 

I gather that Part I is generally to show receipt of spirits in bulk containers into processing (for us, plastic drums of product from production or storage).  And Part II seems to be tracking Bottled product inventory.  (right so far?) 

Line 28 must equal line 9, which implies that for Part II line 28 is for additions to bottled inventory.  But there's also line 29 "received" - what do we use this line for?  Is it the same as line 2? 

Also, lines 13 & 33 seem to both be for taxable withdrawals - is line 13 for if we were to somehow withdraw un-bottled product?  And line 33 is only for withdrawal of bottled product?

Thanks for any help!

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2 hours ago, klattig said:

I gather that Part I is generally to show receipt of spirits in bulk containers into processing (for us, plastic drums of product from production or storage).  And Part II seems to be tracking Bottled product inventory.  (right so far?)

Yes.

2 hours ago, klattig said:

Line 28 must equal line 9, which implies that for Part II line 28 is for additions to bottled inventory.  But there's also line 29 "received" - what do we use this line for?  Is it the same as line 2?

Yes, Line 28 should equal line 9.

Line 29 is presumably if you receive bottled inventory from some other source. Note that per the footnote on line 32, you can't receive bottled product in bond.

2 hours ago, klattig said:

Also, lines 13 & 33 seem to both be for taxable withdrawals - is line 13 for if we were to somehow withdraw un-bottled product?  And line 33 is only for withdrawal of bottled product?

In general, you probably won't withdraw bulk spirits on a tax determined basis. So line 13 will likely remain unused in general use.

Line 33 is for bottled product, or, in the second column, for "packaged" product, meaning drums, barrels, or other containers larger than standard bottle sizes.

A lot of the lines on these reports seem to be for esoteric situations and most will be left blank in general use. Note that even though the TTB has thought of all of these situations, they still leave a few blank lines (21-23, 41-43) where you can add in transactions that they didn't include.

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You have a basic grasp.  Part 1 - bulk; part 2  - bottled (packaged is for industrial spirits).  The spirits normally move from bulk to packaged.  Movement between the bulk and bottled accounts is by balancing entries that decrease the total to account for in one account and increase the total to account for in another.   Also, remember that the total you must account for (line 8 and 31, for bulk and bottled respectively, must agree with the total you account for (lines 26 and 47 respectively).

You can return taxpaid bottled spirits to bond, but only for certain stated purposes, e.g.. reconditioning, rebottling (see 19.452, which lists a lot of requirements and conditions if you do that).   That is where you would receive bottled goods at line 29.

To answer your question, no, line 29 is not the same as line 2.  Always keep your accounting for bulk and bottled goods separate and remember that  anytime you move between the two, you have balancing entries taking them out of one and putting them into the other  (the equality of lines 9 and 28 and lines 6 and 40) .

Note that spirits received on the bonded premises for relabelling only (19.453) are not returned to bond.

A clarification re the footnote - Tax paid or determined spirits are not in bond, so, when they land in your DSP,  you are not receiving them in bond.  You are returning them to bond.

When you return them to bond (rebottling/reconditioning, but not relabeling) you get into the need to file a claim, etc.  and pay taxes all over upon removal.  This is not the case with relabelling because you will not have done anything to affect the taxable quantity in the container.  If you understand the impact of what you do with the spirits once they are on bonded premises, then  you can see why relabeling is treated differently.  

Now I've done my good deed for the day :-).  

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There is a help form on the TTB web sight that gives a more detailed explanation for each line when you roll them over with your cursor. It is somewhat difficult to navigate to, but helped me out considerably.  

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Yes, the rollover form is on TTB's website, but TTB has made the rollover form damned hard to find.   Go to TTB.gov and scroll ti the bottom of the page.  In the Resources column click on Forms.  Scroll down to Tutorials and Helpful Hints, Click on Form 5110.28.  The form doesn't appear.  A page with various links to hints, etc, appears.  There is no direct link to the rollover form here that I can find, so continue to FAQ.  There is a link here, Click to Access Firm.  Click that link.  You get the rollover form, not a blank form.  I can't get to it any other way, but there may be a shortcut I have not found.  

The forms are helpful, but not complete.  I find three areas where I think they do not adequately explain what should appear on the form.  Without going long, these are:

  • The return to bond of bottled spirits as I explained above.  The rollover states only that you cannot receive packaged spirits in bond from another DSP.  It does not explain receipt for rebottling or reconditioning or how that is handled differently than receipts for relabeling.
  • The distinction between redistillation that takes place after transfer if spirits for redistillation in the production account and the redistillation that takes place in the processing account.  See Sections 19.77, 19.314, and 19.602.
  • On hand end of month figures and how they differ in months when you take quarterly inventories of bulk spirits and semiannual inventories of packed spirits.  In non-inventory months, they are balancing figures needed to make the total to account for equal to the total accounted for.  In inventory months they are the actual quantities, with differences between the to account for and accounted for figures accounted for as gains and losse.  

So yes, the rollover is generally helpful and I recommend that you look at it, but it is not complete and it does not always explain how TTB is using the terms you find there.  

 

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Yeah rollover form won't make everything super simple, but will help, as will carefully looking over the glossary of terms in the beginning of each relevant chapter of the CFRs before tackling the reports. Dhdunbar and Jedd Haas are pretty generous with thier time to go into such depth in their replies as well. Took me a couple days, off and on, reading it over and making notes, until I couldn't take it anymore, before it started to click.

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Thanks to all for the good advice!  Finally after 6 months of these bloody forms, I think I've got a handle on it.  Now, to correct all the errors I made the first 5 months...

 - K

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