PREPARATION OF FORM 338 BY WHOLESALERS AND IMPORTERS
Wholesale dealers in liquors, importers
of liquors; and others concerned:
Purpose. The purpose of this industry circular is to clarify the policy with respect
to the preparation of Form 338, Wholesale Liquor Dealer's Monthly Report, by those
persons who are qualified as importers and as wholesalers.
Background. In recent years several amendments (Treasury Decisions 6151 and
6224) were made to the regulations to simplify recordkeeping and reporting requirements. It had been determined that the interests of the Government are served by records showing physical movement and physical possession of spirits without regard to
ownership. It was also found that Customs records provide means for tracing alcoholic
liquors from the original importer to the person into whose custody they are delivered
from Customs custody.
As a result, 26 CFR 251.133 was amended to provide that importers (except where
they receive imported spirits at a taxpaid premises operated in connection with their
distillery or bonded warehouse or at a taxpaid bottling house or rectifying plant) shall
keep records and render reports of the physical receipt and disposition of liquors in
accordance with 26 CFR Part 194 ("Liquor Dealers").
It has now come to our attention that those persons who are qualified both as importers and as wholesalers have not been consistent in preparing Form 338. In some
instances separate reports have been submitted on Form 338 to cover import and wholesale operations, while in other instances the two operations have been reported on one
Form 338 by the importer-wholesaler. This inconsistency may have developed from
varying conditions or methods of business operations which resulted in the application
of the different requirements of 26 CFR 194.233 and 251.136.
Instructions. A separate report of import operations by wholesale liquor dealers
serves no purpose. Therefore, an importer who takes actual physical possession of distilled spirits and who is also a wholesale liquor dealer, and whose place of business as
an importer is the same as the premises where he receives and sends out distilled
spirits as a wholesale liquor dealer, should submit but one report on Form 338 which
would include all physical receipts and dispositions of spirits.
If the same importer's place of business is other than the premises where he receives and sends out distilled spirits as a wholesaler, and the locations are such as to
make it advantageous to keep all records at one premises, it will be necessary for him,
in order to maintain a single record and submit one report on Form 338 covering both
import and domestic transactions, to apply to and receive the permission of the assistant regional commissioner so to do. If he wishes the records to be maintained at his
importer's place of business, the application should be filed in accordance with 26 CFR
194.233; if he wishes the records to be maintained, at the wholesale premises, the applications should be filed in accordance with 26 CFR 251.136.
Inquiries. Inquiries regarding this industry circular should refer to its number and
be addressed to the office of your assistant regional commissioner.
Dwight E. Avis
Director, Alcohol and Tobacco Tax Division
IRS D. C. 40374