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Industry Circular

Number: 91-2

Date: Feburary 4, 1991

Department of the Treasury Bureau of Alcohol, Tobacco and Firearms Washington, D.C. 20226



To Bonded Wine Premises Proprietors and Others Concerned:

Purpose. This circular supplements Industry Circular 90-4, dated November 26, 1990, by giving specific instructions on the method for taking the wine tax credit under the provisions of the Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508, 104 Stat., 1388).

Showing the credit on the wine tax return. If you are eligible for a tax credit during a particular tax return period, show the full amount of wine tax due without credit on line 10 of ATF Form 5000.24. Enter the amount of wine subject to credit and the applicable credit rate as an adjustment decreasing the amount of tax due in Schedue B of the return. Show the total of all decreasing adjustments on Line 20. If you choose to apply the credit against any other tax, show the credit earned, the form number of the return where you plan to use the credit and the due date for that form. Do not deduct the amount from your wine tax return.

Claim for refund or credit of excessively paid taxes. If you do not expect to qualify for a tax credit during a calendar year and you pay tax at the full rate, you may find later in the year that you are eligible for a credit, or a larger credit than the one you actually took. In such a situation, you may file a claim for refund or credit of the tax you overpaid. The claim form and procedure are the same as for any refund or credit of wine taxes.

Repayment of credit erroneously taken. If your production for a calendar year exceeds the estimated production figure you used in computing your credit, and you have reduced the amount of taxes you paid by the erroneous credit, you must repay the difference between the tax you paid and the tax you should have paid. Show the repayment as an adjustment increasing the amount due on Schedule A of your next tax return, along with interest computed from the date you filed each return reflecting the erroneous credit to the date of the adjustment. On request, your regional office will provide information about interest rates. Show the total of all increasing adjustments on line 18. A taxpayer who overclaims credit through negligence or fraud is subject to penalties.

Effective date. The increased taxes and the provision allowing the small producer credit are both effective January 1, 1991.

Inquiries. If you have any questions, please contact your ATF regional office.

Stephen Higgins


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