Rev. Ruling 55-399
Advice has been requested whether homogeneous straight whiskey, which is taxpaid at 8 years of age and consolidated in the original containers as wholesale liquor dealer packages, may still be designated according to the original class and type if the wholesale liquor dealer packages are coated on the outside with paraffin. If so, further advice has been requested concerning the markings and brands to be placed on the wholesale liquor dealer packages.
Section 21, Class 2(b), (c), and (d) of Regulations No. 5 provides that whisky bottled on or after July 1, 1938, and aged in charred new oak cooperage for not less than 24 calendar months may be designated "straight whisky" if a distillate from fermented mash of grain distilled at not more than 160 degree of proof and withdrawn from the cistern room of the distillery at not more than 110 degrees and not less than 80 degrees proof, whether or not such proof is further reduced prior to bottling to not less than 80 degrees proof; and further as "straight rye whisky" or "straight bourbon whisky" if distilled from a fermented mash of grain of which not less than 51 percent is rye grain or corn grain, respectively, and aged in charred new oak cooperage. The regulations define "age" in the case of American type whisky, other than the various types of corn whisky, as that period during which, after distillation and before bottling, distilled spirits have been kept in charred new oak containers. Section 39(a)(2) of the regulations requires that the age of any of the types of straight whisky be stated substantially as follows: "The whisky is (years and/or months) old."
Whisky produced and aged in accordance with the standards referred to and which is bulk gauged solely for tax-payment and return (consolidated) to the original packages for bottling at a later date, would be considered as having remained in the original oak containers from the date of deposit in the warehouse. Therefore, the classification of the spirits and the privilege of claiming age thereon would remain unchanged. However, the provision in the regulations for claiming age contemplates the storage of the spirits in standard oak containers under normal conditions. Therefore, and in accordance with the required age statement in the case of straight whisky, age may be claimed only for the time the whisky in question was stored in the warehouse in standard oak containers under normal conditions. Since no age may be claimed on whisky for the period of its storage in cooperage coated with paraffin, the maximum age to be shown on the labels when the whisky is bottled may not be in excess of 8 years.
The wholesale liquor dealer packages should be marked as indicated in the applicable sections of the Regulations relating to the Warehousing of Distilled Spirits, particularly sections 225.640 and 225.641. If the original barrels to be used for repackaging the taxpaid whisky are coated with paraffin, such treatment would make the barrels comparable to paraffin lined barrels from the standpoint of claiming age, and the "kind of cooperage" should be marked on the barrels as "PAR." If the original barrels to be used for repackaging the taxpaid whisky marked "C" are not so treated, the kind of cooperage to be shown on the barrel may be designated as "C" in accordance with the intent of section 225.640 of the regulations.
26 U.S.C. 5212; 26 CFR 225.640 (27 CFR 201.384)