Ever been audited? The thought of it send chills down most people’s spine. Whether it’s for you personally or your business, no one likes to be audited.

But sometimes your number is picked and you have to endure the process. Hopefully by the end of the experience, you are all the wiser and on the straight compliance road.

So if you want to learn the secrets to reduce your chances of being audited, here are some good basics to follow.

• Realize that all activity, whether it is cellar additions, pumping, topping, barrel movement, bottling, and evaporation; it all needs to be documented. TTB's website has some basic formats within their seminar guides that are acceptable to use for record keeping. http://www.ttb.gov/pdf/compliance-seminar.pdf (pages 136-143)
  
  
• If you don’t like computers (and by now you should because it really can make it easier to keep track of your records) hire someone who does and who can enter your data in a consistent format that YOU will be able to understand and explain to a TTB agent, should you need to three years from now.
  
  
• The FDA requires that all ingredients added to your wines be logged as part of your weekly process and can be traced back to the manufacturer, purchase order and driver’s name that delivered the product.
  
  
• Once a year you should take an actual physical inventory of your wines in bulk or bottled. This inventory should be reconciled against your book ending inventory for the same period. At least once a year declare your gains and losses.
  
  
• If you find that you reported losses and paid taxes due on the losses, only find the missing wine the following year, you can amend up to three years back and recoup the taxes paid.
  • Note: It’s always better to take a credit for the taxes over paid than wait 3 or 4 years for a refund from TTB.
    
    
• Rack your fermented “juice” and declare your wines as “produced” after racking to stay within the allowed percentages of processing losses at the end of the year.
  
  
• If you receive or transfer bulk wines or bottled wines from an Alternating Proprietor under the same location or from another winery at a different location, ALWAYS have a bill of lading or receipt showing that the wines were moved in bond or tax paid, the wineries bond # and your bond #, all pertinent information about the wine (vintage, varietal or percentages if a blend, appellation, special designation if applicable, alc%) so that this information can be tracked to the vineyard if needed.
  
  
• When you blend wines and cross over different alcohol tax classes, be sure to remove volumes from the correct tax class and add the volumes into the correct tax class. Remember, all changes need to be documented.
  
  
• Keep copies of all paperwork justifying wine activity for each period you report with your copy of excise tax returns and operations report.

Contact us if you are looking for assistance with your compliance.

info@winecompliance.com  www.winecompliance.com 707-252-4725

See us at Wineries Unlimited in VA, Booth 504