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Curtis McMillan

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I think it would be a disaster. IRS is a far less navigable agency than the TTB. And the FDA? Really? You want to talk glacial? RIght now the TTB is as responsive as it is because it is motivated to make decisions on your products, etc., in order to generate revenue, its primary focus. If those functions are separated, the FDA would be only focused on preventing things from moving forward and IRS on punishing you for making mistakes. Think about it.

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Obama Mulls Dismantling TTB: Tax Collection to IRS, Trade Practices, Labels, Product Testing to FDA

Source: Beverage News Daily / NABCA

Dec 20th

Alcohol & Tobacco Tax & Trade Bureau would be broken up under a plan being developed by President Obama's Office of Management & Budget.

In a document obtained by Kane's Beverage News Daily, OMB directed the Treasury Department to "explore the impact of folding TTB's tax enforcement and collection functions into IRS, to be proposed in the Budget and implemented in FY 2013." It adds:

"OMB believes TTB's tax mission could fit within the larger framework of IRS's enforcement functions, likely in the Small Business, Self-Employed (SBSE) business unit. There could also be potential cost savings from this mission integration and from leveraging shared administrative expenses."

The OMB directive says that three days after Christmas, "Treasury should submit to OMB a plan analyzing the feasibility and appropriateness of this proposal, including a discussion of how the missions and goals of these two agencies could be combined. Treasury should also discuss the stakeholder implications of this proposal, and options to engage them early in the discussion."

It asks Treasury to provide estimates by Dec. 28 "of any necessary investments associated with the consolidation (relocation costs, staff retraining, system re-engineering and limited capital investment) for 2013 and (to) provide information on operational efficiencies and general long-term savings, including rent and capital maintenance savings, over a 10-year period."

OMB also directs Treasury to "review TTB's regulatory and health-safety functions to determine whether any of those functions aid in enforcement and should be transferred to IRS. Alternatively, Treasury could also consider if these functions should be transferred to the Food & Drug Administration instead."

Excluding a reorganization that occurred after 9/11, it has been two decades since the last administration attempt to split TTB's predecessor agency, the Alcohol, Tobacco & Firearms Bureau.. Then, as now, the theory was that giving the IRS responsibility for collecting Alcohol and tobacco taxes would be more efficient, producing significant cost savings owing to elimination of redundancies.

The industry rallied to convince Congress to block elimination of ATF, and it's expected it will do so again.

Read the last line carefully. Translation: probably not going to happen.

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It was only in 2003 that TTB was created, within Treasury, and the law enforcement functions of ATF were shifted to Justice, so TTB is still a pretty new entity. The knee jerk reaction is that change always makes things worse, but TTB is pretty messed up right now so some kind of change might be in order. It seems unlikely in the current environment, however.

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