Volatile Fruit-Flavor Concentrate Manufacturers—Annual Report, and Usual and Customary Business Records (TTB REC 5520/1)

In general, chapter 51 of the Internal Revenue Code (IRC; 26 U.S.C.) sets forth Federal excise tax rates and application, permit, and other requirements related to alcohol products produced in or imported into the United States. However, while volatile fruit-flavor concentrates contain alcohol when they are manufactured from the mash or juice of a fruit by an evaporative process, under the IRC at 26 U.S.C. 5511, alcohol excise tax and most other provisions of chapter 51 do not apply to such concentrates if their manufacturers file applications, keep records, submit reports, and meet certain other requirements prescribed by regulation for the protection of the revenue. As authorized by that IRC section, the TTB regulations in 27 CFR part 18 require volatile fruit-flavor concentrate manufacturers to submit an annual summary report using form TTB F 5520.2 to account for all concentrates produced, removed, or treated so as to be unfit for beverage use. Concentrate manufacturers compile this report from usual and customary records kept during the normal course of business, and, under the part 18 regulations, respondents must retain such records for 3 years. The annual summary reports and their supporting records are necessary to protect the revenue; TTB uses the required information to verify that volatile fruit-flavor concentrates, which contain untaxed alcohol, are not being diverted to taxable alcohol beverage use.

The latest form for Volatile Fruit-Flavor Concentrate Manufacturers—Annual Report, and Usual and Customary Business Records (TTB REC 5520/1) expires 2021-10-31 and can be found here.