(a) Recording of losses. A permittee shall determine and record, in the records prescribed by subpart P of this part, the quantity of specially denatured spirits or recovered alcohol lost on premises:

(1) When an inventory is taken,

(2) At the time a container is emptied, or

(3) Immediately upon the discovery of any loss due to casualty, theft or other unusual causes.

(b) Claims. A claim for allowance of specially denatured spirits will be filed as prescribed in §20.205, in the following circumstances:

(1) If the quantity lost during the annual accounting period (§20.263(c)) exceeds one percent of the quantity to be accounted for during that period, and is more than 50 gallons; or,

(2) If the loss was due to theft or unlawful use or removal, the permittee shall file a claim for allowance of losses regardless of the quantity involved.

(Approved by the Office of Management and Budget under control number 1513-0062)

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985, as amended by T.D. TTB-140, 81 FR 59456, Aug. 30, 2016]