U.S. Code » Title 26 » Subtitle Subtitle E— Alcohol, Tobacco, and Certain Other Excise Taxes › Chapter CHAPTER 51— DISTILLED SPIRITS, WINES, AND BEER › Subchapter Subchapter B— Qualification Requirements for Distilled Spirits Plants

26 U.S.C. § 5173

Bonds

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(a) Operations at, and withdrawals from, distilled spirits plant must be covered by bond(1) Operations

Except as provided under section 5551(d), no person intending to establish a distilled spirits plant may commence operations at such plant unless such person has furnished bond covering operations at such plant.

(2) Withdrawals

Except as provided under section 5551(d), no distilled spirits (other than distilled spirits withdrawn under section 5214 or 7510) may be withdrawn from bonded premises except on payment of tax unless the proprietor of the bonded premises has furnished bond covering such withdrawal.

(b) Operations bondsThe bond required by paragraph (1) of subsection (a) shall meet the requirements of paragraph (1), (2), or (3) of this subsection:(1) One plant bond

The bond covers operations at a single distilled spirits plant.

(2) Adjacent wine cellar bond

The bond covers operations at a distilled spirits plant and at an adjacent bonded wine cellar.

(3) Area bondThe bond covers operations at 2 or more distilled spirits plants (and adjacent bonded wine cellars) which—(A) are located in the same geographical area (as designated in regulations prescribed by the Secretary), and(B) are operated by the same person (or, in the case of a corporation, by such corporation and its controlled subsidiaries).(c) Withdrawal bonds

The bond required by paragraph (2) of subsection (a) shall cover withdrawals from 1 or more bonded premises the operations at which could be covered by the same operations bond under subsection (b).

(d) Unit bonds

Under regulations prescribed by the Secretary, the requirements of paragraphs (1) and (2) of subsection (a) shall be treated as met by a unit bond which covers both operations at, and withdrawals from, 1 or more bonded premises which could be covered by the same operations bond under subsection (b).

(e) Terms and conditions(1) In generalAny bond furnished under this section shall be conditioned that the person furnishing the bond—(A) will faithfully comply with all provisions of law and regulations relating to the activities covered by such bond, and(B) will pay—(i) all taxes imposed by this chapter, and(ii) all penalties incurred by, or fines imposed on, such person for violation of any such provision.(2) Other terms and conditions

Any bond furnished under this section shall contain such other terms and conditions as may be required by regulations prescribed by the Secretary.

(f) Amount(1) In general

The penal sum of any bond shall be the amount determined under regulations prescribed by the Secretary.

(2) Maximum and minimum amount

The Secretary shall by regulations prescribe a minimum amount and a maximum amount for each type of bond which may be furnished under this section.

(g) Total amount available

The total amount of any bond furnished under this section shall be available for the satisfaction of any liability incurred under the terms and conditions of such bond.

(h) Special rulesFor purposes of this section—(1) Withdrawal bondsIn the case of any bond furnished under this section which covers withdrawals but not operations—(A) such bond shall be in addition to the operations bond, and(B) if distilled spirits are withdrawn under such bond, the operations bond shall no longer cover liability for payment of the tax on the spirits withdrawn.(2) Adjacent wine cellars(A) RequirementsNo wine cellar shall be treated as being adjacent to a distilled spirits plant unless—(i) such distilled spirits plant is qualified under this subchapter for the production of distilled spirits, and(ii) such wine cellar and the distilled spirits plant are operated by the same person (or, in the case of a corporation, by such corporation and its controlled subsidiaries).(B) Bond in lieu of wine cellar bond

In the case of any adjacent wine cellar, a bond furnished under this section which covers operations at such wine cellar shall be in lieu of any bond which would otherwise be required under section 5354 with respect to such wine cellar (other than supplemental bonds required under the second sentence of section 5354).

(Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1349; amended Pub. L. 91–659, § 4, Jan. 8, 1971, 84 Stat. 1966; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 96–39, title VIII, § 805(c), July 26, 1979, 93 Stat. 276; Pub. L. 114–113, div. Q, title III, § 332(b)(2)(A), Dec. 18, 2015, 129 Stat. 3105.)Editorial NotesPrior Provisions

A prior section 5173, act Aug. 16, 1954, ch. 736, 68A Stat. 628, related to “distillery fixtures and equipment”, prior to the general revision of this chapter by Pub. L. 85–859. See sections 5178(a)(1)(A), (2)(B)(C), (c)(1) and 5202(b) of this title.

Provisions similar to those comprising subsecs. (a), (b), (b)(1), (b)(1)(A) to (C), (b)(3), (c), (c)(1), (d) and (e)(1) of this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by Pub. L. 85–859, as follows:

Present subsecs.:

Prior sections

(a)

5172, 5176(a), 5231, 5232(a), 5272(a), 5301–5303, 5304(a)(5), 5305, 5311(a)(3).

(b)

5176 (a), (d).

(b)(1)

5176(a), 5177(c).

(b)(1)(A)–(C)

5177(b)(1)–(3).

(b)(3)

5177(b)(4).

(c)

5232(a), 5302, 5303, 5306, 5331(a)(3).

(c)(1)

5232(a).

(d)

5272(a).

(e)(1)

5304(a)(5).

The prior sections, act Aug. 16, 1954, ch. 736, are set out in 68A Stat. 627, 629 to 631, 643, 650, 654, 655, 657, 662.

Amendments

2015—Subsec. (a)(1). Pub. L. 114–113, § 332(b)(2)(A)(i), substituted “Except as provided under section 5551(d), no person” for “No person”.

Subsec. (a)(2). Pub. L. 114–113, § 332(b)(2)(A)(ii), substituted “Except as provided under section 5551(d), no distilled spirits” for “No distilled spirits”.

1979—Pub. L. 96–39, among other changes, struck out provisions relating to liens on distillery property and the furnishing of indemnity bonds as methods of securing tax payments and inserted provisions relating to the one plant operations bond, which will cover the operations at a bonded wine cellar which is adjacent to the distilled spirits plant and operated by the same person.

1976—Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.

1971—Subsec. (b)(1). Pub. L. 91–659, § 4(b), extended exception clause in parenthetical by making reference to cl. (4) of this subsection.

Subsec. (b)(2). Pub. L. 91–659, § 4(c), inserted reference to par. (4).

Subsec. (b)(4). Pub. L. 91–659, § 4(a), added par. (4).

Statutory Notes and Related SubsidiariesEffective Date of 2015 Amendment

Amendment by Pub. L. 114–113 applicable to any calendar quarters beginning more than 1 year after Dec. 18, 2015, see section 332(c) of Pub. L. 114–113, set out as a note under section 5061 of this title.

Effective Date of 1979 Amendment

Amendment by Pub. L. 96–39 effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as a note under section 5001 of this title.

Effective Date of 1971 Amendment

Amendment by Pub. L. 91–659 effective on first day of first calendar month which begins more than 90 days after Jan. 8, 1971, see section 6 of Pub. L. 91–659, set out as an Effective Date note under section 5066 of this title.

Transitional Rules Relating to All-In-Bond Method

Pub. L. 96–39, title VIII, § 809(c), July 26, 1979, 93 Stat. 292, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: “For purposes of section 5173 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to bonds), each person who intends to continue operation at a premises after December 31, 1979, shall be treated as intending to establish a distilled spirits plant on such premises on January 1, 1980.”

Notes of Decisions
Cited in 37 cases, 1961–1994 · leading case: United States v. Armando Restaino, 369 F.2d 544 (3rd Cir. 1966).
Sort: Relevance Newest Treatment
United States v. Armando Restaino, 369 F.2d 544 (3rd Cir. 1966). “§§ 5179 (a), 5601(a) (1); carrying on the business of a distiller without first having obtained a bond, 26 U.S.C. §§ 5173 (a), 5601(a) (4); manufacture of distilled spirits on premises which have not been bonded, 26 U.”
Robert F. O'Neal v. United States, 411 F.2d 131 (5th Cir. 1969). “§§ 5179 (a) and 5601(a); in Count 2 with carrying on the business of a distiller without having given bond, in violation of 26 U.S.C. §§ 5173 and 5601(a); in Count 3 with engaging in and carrying on the business of a distiller with intent to defraud the United States of the tax…”
United States v. Roy Whitehead, 424 F.2d 446 (6th Cir. 1970). · cites it 2× “I would, however, reverse appellant’s convictions on count 1 for carrying on the business of a distiller without giving bond in violation of 26 U.S.C. §§ 5173 (a) and 5601(a) (4); on counts 3 and 4 for possessing and transporting distilled spirits in containers not having…”
Ralph Dupoint v. United States, 388 F.2d 39 (5th Cir. 1968). “He was acquitted of counts charging the carrying on of the business of a distiller without giving bond and with intent to defraud the United States of the tax imposed thereon, 26 U.S.C.A. §§ 5173 , 5601 (a), and 5602.”
United States v. LaBerge, 267 F. Supp. 686 (D. Maryland 1967). · cites it 2× “Count two charges the defendants with failure to give bond as required by 26 U.S.C. § 5173 (a) before commencing business as a distiller.”
United States v. Frank Warren Price & William Riley, 345 F.2d 256 (2d Cir. 1965). “§ 5222 (a) (1), carrying on a distillery business without the required bond, 26 U.S.C.A. § 5173 (a), (b), and conspiring to violate all of the above laws, 18 U.”
United States v. McGaha, 205 F. Supp. 949 (E.D. Tenn. 1962). “, 26 U.S.C. §§ 5173 , 5179, 5180, 5205(a) (2), 5222, 5601(a) (1), 5601(a) (4), 5601(a) (7), 5604(a) (1) and 5681(c), and his case is set for trial in this court at 9:00 o’clock a.”
Ralph Hubert Houston, Jr. v. United States, 419 F.2d 30 (5th Cir. 1969). “Prior to execution of such Stipulation, the Petitioner and other defendants conferred with their trial counsel in the presence of the United States Attorney, at which time they were advised of their right to object to trial in the Albany Division of this Court on the ground that…”
United States v. Elbert Roscoe Walden & Raeford Thomas Walden, 411 F.2d 1109 (4th Cir. 1969). “The indictment charged the Waldens in count one with violating 26 U.S.C. §§ 5173 and 5601(a) (4) by carrying on the business of distillers without having given bond, and in count two with violating 26 U.”
United States v. William 'Buddy' Lester, 491 F.2d 680 (6th Cir. 1974). “Appellant was convicted after jury trial on three counts of operating an unregistered still, in violation of 26 U.S.C. §§ 5173 (a), 5179(a) and 5222(a) (1970).”
Lee Gilliland, Wilmon Roy Green & Melvin Franklin Pearce v. United States, 385 F.2d 912 (5th Cir. 1967). “§§ 5179 (a), 5601(a); carrying on the business of a distiller without giving bond, 26 U.S.C.A. §§ 5173 , 5601(a); carrying on the business of a distiller with intent to defraud the United States, 26 U.”
United States v. Nicholas Ray Walker, 307 F.2d 250 (4th Cir. 1962). “26 U.S.C. § 5173 . 3 . 26 U.S.C. § 5222 .”
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