Notification of Widespread TTB Audits

Tue, 4/23/19
Jeremy Little and Kimberly Corcoran

For our winery, distributor, and retailer clients, please note that the TTB has increased its auditing of sales records, and has also changed its approach to such audits. The TTB is auditing for compliance with federal limitations on the sale of wine, focusing on conduct such as consignment sales, heavy pallets, and “distributor banks.” The TTB has received special funding for these enforcement efforts and has hired additional investigators to focus on these issues.

In addition, we have heard that the TTB’s decision to take an aggressive stance on these audits is coming from TTB headquarters. Therefore, these actions do not appear to be the result of one or two TTB agents acting outside the TTB mandate. CMPR has been in contact with Congressman Mike Thompson’s office to let him know of the aggressive enforcement efforts we have seen to date, and we understand that he will be meeting with TTB officials to discuss the enforcement process.

While you have a legal duty to cooperate with TTB investigators, we encourage you to keep control over your business records. If the TTB comes to your premises and seeks to remove documents, ask for or prepare a receipt so you know what documents they took, or offer to make them copies yourself. It is also our experience that the TTB investigators will contact your employees and independent salespeople, so you may want to alert them to the possibility of a “cold call” interview from a TTB official.

There is much going on, and it is all happening so quickly that it cannot be completely covered in this short email blast. If you have any questions at all, or if you’ve been contacted by a TTB investigator and would like representation, please contact Jeremy Little or Kim Corcoran.

Jeremy Little jlittle@cmprlaw.com

Kim Corcoran kcorcoran@cmprlaw.com

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