How to handle LOSS when receiving TIB barrels

[johnbsys]

Say I purchase a 5-yr barrel of whiskey from a broker. The TIB paperwork from the broker shows Proof Gallons at the time the barrel was filled 5 years ago.  When I receive it, the quantity is lower do to normal aging evaporation.  As long as I document the difference am I only responsible for paying federal excise tax on the actual amount I received or what the broker said they shipped?

[Jedd Haas]

When you receive the barrel, you enter it in storage inventory at the stated proof gallons. When you dump the barrel, you gauge the proof gallons and record the loss. You then account for the loss on the monthly storage report.

Tax liability is created when the final product is withdrawn from bond and you only owe for what is actually withdrawn.

Be sure to document everything so that your records support the claimed losses.

[Dallas]

I can't see where barrel storage losses are exempted from the 1.5% per quarter maximum storage losses.   This is timely for us because we dumped barrels we bought in bond this month, and experienced a 6% loss.  Do we need to file a claim for remission of tax, or are barrels exempted somewhere?

27 cfr 19.462:

 

Quote

 

(e) Excessive storage losses. A proprietor must pay the tax on excessive storage account losses of spirits unless the proprietor files a claim for remission in accordance with § 19.263 and TTB allows the claim under § 19.268. TTB will consider a storage account loss as excessive when the quantity of spirits lost during a calendar quarter from all storage tanks and stored bulk conveyances exceeds 1.5 percent of the total quantity contained in the tanks and stored bulk conveyances during the calendar quarter.

(26 U.S.C. 5008, 5370)