Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 60-93

1960-1 C.B. 709

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Rev. Rul. 60-93

Section 5008(c)(3)(F) of the Internal Revenue Code provides in part that actual determined losses incurred in the manufacture of gin and vodka in a closed system may be allowed in addition to losses allowable under sections 5008(c)(1)(A) and 5008(c)(1)(B) of the Code. Section 201.486 of the Distilled Spirits Plants Regulations restricts allowance for such manufacturing losses to spirits withdrawn from bond on payment or determination of tax by the proprietor of the bottling premises. The provisions of section 201.485 and section 201.487 of the Distilled Spirits Plants Regulations, relating respectively to operating losses and losses in manufacture of gin and vodka, are consistent with the position that a rectifier may be allowed losses incurred in the manufacture of gin and vodka in addition to being allowed the losses otherwise allowable. The Distilled Spirits Plants Regulations contain no requirement that a rectifier must file claim for any of the losses allowable under section 5008(c) of the Code. Held , a rectifier may, if he desires, file claims for only the losses incurred in the manufacture of gin and vodka in a closed system; such losses are only allowable in the ratio which the proof gallons of eligible spirits used in such manufacture bears to the total proof gallons of eligible and ineligible spirits so used.