Rev. Ruling 55-176
Certain Recovered Spirits may be used as Coloring, Flavoring, and Blending Materials
A small percentage of recovered spirits (not neutral) may be used, with in the 2-1/2 percent limitation permitted for harmless coloring, flavoring, and blending materials prescribed in section 22 of Regulations No. 5, in a blend of straight whisky and neutral spirits. The basic blend must consist of the prescribed percentages of straight whisky and neutral spirits within the limitations of the approved formula, Form 27-B Supplemental, Formula and Process for Rectified Products, covering such blend. However, neutral spirits as such may not be used as a part of the 2-1/2 percent permitted for coloring, flavoring and blending materials. See Rev. Rul. 54-350, page 16. Neutral spirits which have been reduced in proof to less than 190 and stored in reused cooperage, as for example, for a period of from 2 to 4 years are still classed as "neutral spirits" within the intent of Revenue Ruling 54-350, supra, and, accordingly, may not be used as a part of the 2-1/2 percent permitted for coloring, flavoring, and blending materials.
26 U.S.C. 5281; 26 CFR 235.345 (27 CFR 201.422)