(a) General. For each eligible distilled spirits product to be tax determined in accordance with § 19.250, the proprietor must establish an inventory reserve account, in accordance with this section.
(b) Deposit records. For each batch of the bottled or packaged product, the proprietor must enter into the inventory reserve account a deposit record, which may be combined with the bottling and packaging record required by § 19.599, showing:
(1) The name of the product;
(2) The bottling and packaging record serial number;
(3) The date the bottling or packaging was completed;
(4) The total proof gallons bottled and packaged; and
(5) The effective tax rate of the product computed in accordance with § 19.246.
(c) Depletions. The inventory reserve account for each product must be depleted in the same order in which the deposit records were entered into the account. The proprietor must record a depletion for each disposition (for example, a taxable removal, an exportation, or an inventory shortage or breakage) by entering on the deposit record:
(1) The transaction date;
(2) The transaction record serial number;
(3) The proof gallons disposed of; and
(4) The proof gallons remaining. If any depletion exceeds the quantity of product remaining on the deposit record, the proprietor must deplete the remaining quantity, close the deposit record, and then deplete the remainder of the transaction from the next deposit record.