26 U.S. Code § 5173 - Bonds
(a) Operations at, and withdrawals from, distilled spirits plant must be covered by bond
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.
(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:
(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
(c) Withdrawal bonds
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
(1) In general
The penal sum of any bond shall be the amount determined under regulations prescribed by the Secretary.
(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—
(2) Adjacent wine cellars
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
(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).
Source(Added Pub. L. 85–859, title II, § 201,Sept. 2, 1958, 72 Stat. 1349; amended Pub. L. 91–659, § 4,Jan. 8, 1971, 84 Stat. 1966; Pub. L. 94–455, title XIX, § 1906(b)(13)(A),Oct. 4, 1976, 90 Stat. 1834; Pub. L. 96–39, title VIII, § 805(c),July 26, 1979, 93 Stat. 276.)
A prior section 5173, act Aug. 16, 1954, ch. 736, 68A Stat. 628, related to “distillery fixtures and equipment”, prior to the general revision of this chapter by Pub. L. 85–859. See sections 5178 (a)(1)(A), (2)(B)(C), (c)(1) and 5202 (b) of this title.
Provisions similar to those comprising subsecs. (a), (b), (b)(1), (b)(1)(A) to (C), (b)(3), (c), (c)(1), (d) and (e)(1) of this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by Pub. L. 85–859, as follows:
|Present subsecs.:||Prior sections|
|(a)||5172, 5176(a), 5231, 5232(a), 5272(a), 5301–5303, 5304(a)(5), 5305, 5311(a)(3).|
|(b)||5176 (a), (d).|
|(c)||5232(a), 5302, 5303, 5306, 5331(a)(3).|
The prior sections, act Aug. 16, 1954, ch. 736, are set out in 68A Stat. 627, 629 to 631, 643, 650, 654, 655, 657, 662.
1979—Pub. L. 96–39, among other changes, struck out provisions relating to liens on distillery property and the furnishing of indemnity bonds as methods of securing tax payments and inserted provisions relating to the one plant operations bond, which will cover the operations at a bonded wine cellar which is adjacent to the distilled spirits plant and operated by the same person.
1976—Pub. L. 94–455struck out “or his delegate” after “Secretary” wherever appearing.
1971—Subsec. (b)(1). Pub. L. 91–659, § 4(b), extended exception clause in parenthetical by making reference to cl. (4) of this subsection.
Subsec. (b)(2). Pub. L. 91–659, § 4(c), inserted reference to par. (4).
Subsec. (b)(4). Pub. L. 91–659, § 4(a), added par. (4).
Effective Date of 1979 Amendment
Amendment by Pub. L. 96–39effective Jan. 1, 1980, see section 810 ofPub. L. 96–39, set out as a note under section 5001 of this title.
Effective Date of 1971 Amendment
Amendment by Pub. L. 91–659effective on first day of first calendar month which begins more than 90 days after Jan. 8, 1971, see section 6 ofPub. L. 91–659, set out as an Effective Date note under section 5066 of this title.
Transitional Rules Relating to All-In-Bond Method
Pub. L. 96–39, title VIII, § 809(c),July 26, 1979, 93 Stat. 292, as amended by Pub. L. 99–514, § 2,Oct. 22, 1986, 100 Stat. 2095, provided that: “For purposes of section 5173 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to bonds), each person who intends to continue operation at a premises after December 31, 1979, shall be treated as intending to establish a distilled spirits plant on such premises on January 1, 1980.”