26 USC 5173 – Bonds
(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Except as provided under section 5551(d), no distilled spirits (other than distilled spirits withdrawn under section 5214 or 7510) may be withdrawn from bonded premises except on payment of tax unless the proprietor of the bonded premises has furnished bond covering such withdrawal.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 bonds
The 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 bond
The 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
Terms Used In 26 USC 5173
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- corporation: includes associations, joint-stock companies, and insurance companies. See 26 USC 7701
- person: shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation. See 26 USC 7701
- Secretary: means the Secretary of the Treasury or his delegate. See 26 USC 7701
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 general
Any 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 rules
For purposes of this section—
(1) Withdrawal bonds
In 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) Requirements
No 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).