
When a TTB Offer in Compromise makes the news, it is typically because the offer is a high number.
For example, it was big news a couple years ago when Anheuser Busch paid $5 million to settle alleged trade practice violations with the TTB, as well as agreed to a 2 day permit suspension.
While high dollar settlements with TTB are certainly newsworthy, I have been intrigued by seeing the opposite trend recently, in that TTB has been pursuing smaller claims against smaller industry members so far this year.
Four months into 2022, there have been seven Offers in Compromise published on TTB's website. A quick summary is outlined below:
1/10/2022 - TTB Wholesaler, Alleged Trade Practice violation - Settled for $225,000.
1/18/2022 - DSP - Alleged Trade Practice violation - Settled for $305,000.
3/1/2022 - DSP - Failure to pay/file federal excise taxes - Settled for $1,000.
3/9/2022 - Brewery - Alleged various compliance issues - Settled for $7,400.67.
4/5/2022 - Tobacco Manufacturer - Alleged various compliance issues - Settled for $40,000.
4/15/2022 - Brewery - Alleged various compliance issues - Settled for $25,000.
5/2/2022 - DSP - Alleged various compliance issues - Settled for $15,000.
As one can see, after the first two offers accepted at the start of the year, the average settlement amount with TTB declines significantly.
This may indicate a new trend for TTB's enforcement division, as it appears that TTB is pursuing smaller industry members for more routine compliance-based issues. In other words, the larger settlements at the start of the year were for alleged Trade Practice violations, which are often high-level claims triggered by complaints from other industry members seeking a level playing field. The other Offers in Compromise appear to focus more on day-to-day compliance issues, which tend to be a more common problem for smaller industry members.
Time will tell if this is a sign of a larger trend. If you are a smaller craft brewery, winery, or distillery, now might be a good time to review your TTB compliance plan and get ahead of any issues.
Comments