Feds Take a Sudden Interest in Busting Home Distillers



Last March investigators with the U.S. Treasury Department's Alcohol and Tobacco Tax and Trade Bureau (TTB) joined agents from the Florida Division of Alcoholic Beverages and Tobacco in a "moonshine operation" that yielded eight arrests and 46 home stills. The TTB explained that "the possession of unregistered stills and the production of distilled spirits without a Federal permit and without payment of tax are Federal felony offenses which may result in the seizure and forfeiture of land and other property associated with the illegal activity." The TTB helpfully added that "persons wishing to distill spirits legally are encouraged to visit the TTB distilled spirits homepage at http://www.ttb.gov/spirits/index.shtml for guidance and to apply for a permit." Amateur distillers are apt to be disappointed by the information on that page, which includes the following:

You may not produce spirits for beverage purposes without paying taxes and without prior approval of paperwork to operate a distilled spirits plant. [See 26 U.S.C. 5601 &5602 for some of the criminal penalties.] There are numerous requirements that must be met that also make it impractical to produce spirits for personal or beverage use. Some of these requirements are filing an extensive application, filing a bond, providing adequate equipment to measure spirits, providing suitable tanks and pipelines, providing a separate building (other than a dwelling) and maintaining detailed records, and filing reports. All of these requirements are listed in 27 CFR Part 19.

In other words, if you want to try your hand at distilling without risking arrest and forfeiture, forget it. Unlike home winemaking and brewing, which have been legal since 1978, home distilling is a federal felony punishable by up to five years in prison (plus five more for tax fraud). But until recently, according to Rick Morris, founder of the Hobby Distiller's Association, the feds did not much care if you turned your homemade wine into brandy or your homemade beer (minus the hops) into whiskey, as long as you didn't make any money in the process. Morris, who owns Brewhaus America, a leading supplier of home distilling equipment that has been serving amateur spirit makers since 1999, says the raids in Florida, which mainly targeted "simple hobbyists," reflect a shift in policy:

In May of 2013, the TTB demanded sales records from major distillation equipment distributors reaching back to 2010, and required the ongoing forfeit of this information for every distiller or major distiller component sold, including the name and address of the purchaser! It now appears that this information is being utilized by the TTB as a target list. Purchasing as little as a simple boiling kettle from one of these companies may well earn you a visit from armed TTB agents.

Morris argues that the ban on home distilling, which merely concentrates the alcohol that people already are allowed to produce through fermentation, is arbitrary and should be repealed by Congress. In the meantime, he wonders why the TTB seems suddenly intent on enforcing that ban:

In their most recent not-so-veiled threat, the TTB sent letters to a large group of distiller owners—again, mostly hobbyists—outlining the law and the associated penalties, and including a copy of their press release about their enforcement action in Florida.

What kind of resources are they devoting to this effort, and what benefit do they expect in return? Hobbyists are normal, law abiding Americans—they aren't criminal organizations, they represent absolutely no threat to public health or safety, are not cheating the government of excise tax revenues from illicit sales, etc. 

What public policy objective are they hoping to advance? I can't think of a good one.

Me neither, but I am not a federal alcohol regulator. As I reported back in 1994, people with that job tend to take stupid rules very seriously.

Reason TV covered the ban on home distilling in 2010: