Overview 

Mission Statement

Collect the Federal excise taxes on alcohol, tobacco, firearms, and ammunition, and assure 

compliance with Federal tobacco permitting and alcohol permitting, labeling, and marketing 

requirements to protect consumers. 

Program Summary by Budget Activity 

Dollars in Thousands 

Appropriation FY 2010 FY 2011 FY 2012 FY 2010 to FY 2012

Enacted Annualized

CR Level

Request $ Change % Change

 Collect the Revenue $53,000 $53,000 $48,939 ($4,061) (7.7%)

 Protect the Public $50,000 $50,000 $48,939 ($1,061) (2.1%)

Total Appropriated Resources $103,000 $103,000 $97,878 ($5,122) (5.0%)

Total FTE 535 535 502 (33) (6.2%)

Note: In FY 2010, Congress appropriated $3 million in two-year funds for the hiring, training, and equipping of 

special agents and related support personnel. This funding expires September 30, 2011. 

FY 2012 Priorities 

• Collect roughly $24 billion in annual excise tax revenues due to the federal government; 

• Reduce the burden of compliance by expanding and promoting electronic filing options for 

industry members, including the online system that will allow industry members to apply for 

an original permit to start a new alcohol or tobacco business or file for an amended permit for 

an existing business;

• Promote voluntary compliance through industry outreach and education programs;

• Complete audits and investigations of TTB taxpayers based upon risk and random selection 

to ensure lawful operations and tax reporting and payment compliance; 

• Assure compliance with federal alcohol beverage production, labeling, and marketing 

requirements; 

• Detect criminal diversion activity, including counterfeit alcohol and tobacco products, to 

protect the federal revenue stream, U.S. consumers, and industry by even enforcement of 

laws and addressing criminal activity in the fair market; 

• Conduct statistically valid marketplace sampling programs to determine industry-wide 

compliance with advertising, labeling, and formulation regulations for alcohol beverages; 

• Enhance TTB product safety activities focusing on the integrity and safety of domestic and 

imported alcohol beverage products; and 

• Promote U.S. exports by facilitating industry compliance with foreign requirements and by 

working with foreign regulators to reduce barriers to trade. 

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Table of Contents 

Overview ........................................................................................................................................ 1

Mission Statement ....................................................................................................................... 1

Program Summary by Budget Activity ....................................................................................... 1

Section 1 – Purpose ....................................................................................................................... 3

1A – Description of Bureau Vision and Priorities ...................................................................... 3

1B – Program History and Future Outlook ................................................................................. 5

Section 2 – Budget Adjustments and Appropriation Language ............................................. 13

2.1 – Budget Adjustments Table ............................................................................................... 13

2A – Budget Increases and Decreases Description ................................................................... 13

2.2 – Operating Levels Table .................................................................................................... 15

2.3 – Appropriations Detail Table ............................................................................................. 16

2B – Appropriations Language and Explanation of Changes ................................................... 16

2C – Legislative Proposals ........................................................................................................ 16

Section 3 – Budget and Performance Plan ............................................................................... 18

3.1 – Budget by Strategic Outcome .......................................................................................... 18

3.2.1 Collect the Revenue Budget and Performance Plan ......................................................... 19

3.2.2 Protect the Public Budget and Performance Plan ............................................................. 21

Section 4 – Supporting Materials .............................................................................................. 23

4A – Human Capital Strategy Description ................................................................................ 23

4.1 – Summary of IT Resources Table ...................................................................................... 25

4B – Information Technology Strategy ..................................................................................... 26

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Section 1 – Purpose 

1A – Description of Bureau Vision and Priorities

TTB is responsible for the administration and enforcement of those sections of the Internal 

Revenue Code of 1986 (IRC) associated with the collection of excise taxes on alcohol, tobacco, 

firearms, and ammunition, and the Federal Alcohol Administration Act, which provides for the 

regulation of the alcohol beverage industry and the protection of consumers of alcohol 

beverages. The bureau also administers the Webb-Kenyon Act, which prohibits the shipment of 

alcohol beverages into a state in violation of state law. 

In Fiscal Year (FY) 2012, TTB will continue to focus its efforts on helping industry members 

comply with federal alcohol, tobacco, firearms, and ammunition laws and regulations, in the 

interest of collecting excise taxes due upon those commodities, and enforcing the tax code by 

addressing tax evasion and the illicit trade in alcohol and tobacco products. The bureau will also 

transition from a pre-market review to a post-market evaluation of alcohol beverage products, 

which will promote a marketplace for alcohol beverages that complies fully with federal 

production, labeling, advertising, and marketing requirements. 

TTB’s priorities are directly linked to the following key strategic objectives: 

Collect All Revenue Due to the Federal Government--

Tax Verification and Validation: 

• Ensure correct payment of federal excise taxes, focusing on audits of large and high risk 

taxpayers; and 

• Identify and address tax evasion and other criminal violations of the IRC in the regulated 

industries, including diversion and smuggling of taxable commodities.

Voluntary Compliance: 

• Develop methods of promoting voluntary tax compliance through partnerships with 

industry, states, and other federal agencies; and 

• Participate in industry seminars and provide web-based education seminars to instruct 

industry members regarding federal compliance requirements. 

Effective and Efficient Tax Collection Systems: 

• Reduce the taxpayer paperwork burden associated with filing tax payments by creating 

alternative electronic filing methods. 

Protect the Public Through Education, Product Testing, and Investigation--

Business Integrity: 

• Ensure that only qualified permit applicants operate in the alcohol beverage and tobacco 

products industries. 

Product Integrity: 

• Enforce compliance with federal laws related to the production of alcohol beverage 

products; 

• Perform appropriate sampling, evaluation, and laboratory analyses of regulated 

commodities to ensure the integrity and safety of alcohol beverage products in the 

marketplace; 

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• Review and act on labels, formulas, and advertising for domestic and imported beverage 

alcohol products to ensure consumers have complete and accurate product information; 

and 

• Respond to industry and consumer complaints regarding the regulated commodities by 

investigating incidents and allegations of product contamination and adulteration. 

Market Integrity: 

• Investigate cases of unfair trade practices and violations of labeling and advertising 

standards in the alcohol beverage industry; 

• Regulate the international import/export trade in beverage and industrial alcohol; and 

• Facilitate growth in U.S. exports by working with foreign regulators to reduce barriers to 

trade and by facilitating industry compliance with foreign trade requirements. 

Effective and Efficient Regulatory Systems to Facilitate Economic Growth: 

• Use electronic government solutions to reduce taxpayer burden and improve service 

through online filing solutions for permit applications, COLA applications, formula 

submissions, and other required information. 

The total resources required to support TTB activities for FY 2012 are $100,875,000, including 

$97,878,000 from direct appropriations and $2,997,000 from reimbursable activities (offsetting 

collections), mainly from the Puerto Rico cover-over program. 

Treasury High Priority Performance Goals 

TTB expects to accomplish the following in FY 2012 in support of Treasury’s high priority 

performance goals: 

Increase Voluntary Tax Compliance 

TTB’s outreach and education programs help taxpayers understand and comply with federal tax 

requirements. The bureau will: 

• Participate in industry seminars and provide training to educate taxpayers, especially 

small business owners, regarding federal compliance issues; and 

• Continue the Customer Care program, implemented in FY 2010, to monitor, evaluate, 

and assist newly permitted industry members with their required tax returns and 

operational report filings. Under this program, TTB specialists review the tax returns and 

operational reports of new industry members within the first 90 to 180 days of operation 

for accuracy and common errors, and follow up when necessary in order to bring industry 

members into compliance and ensure an understanding of federal requirements. 

Significantly Increase the Number of Paperless Transactions with the Public 

TTB has made progress in automating its tax and regulatory filing processes to reduce the 

paperwork burden and enable members of the alcohol and tobacco industries to submit 

mandatory applications and requests in an online environment. Through outreach efforts to 

industry, the bureau expects to: 

• Increase the electronic filing rate for alcohol beverage label applications to above 

80 percent; 

• Increase electronic filings of permit applications. Permits Online is an e-filing solution 

introduced in FY 2011 for original and amended permit applications; and 

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• Increase Pay.gov registrations to enable taxpayers to file operational reports and tax 

returns online by continuing to register and educate new permittees. 

“Going Green” Goals 

TTB will support the continuation of environmentally sound policies and practices in the 

management of Information Technology (IT) equipment, fleet management, and in the 

acquisitions process. 

Increased Energy Efficiency 

TTB currently leverages technologies to ensure that electronic equipment uses efficient power 

management settings. The power management settings on work stations include powering down 

computer monitors, hard drives, and machines during periods of inactivity. TTB also has the 

capability to audit machines to assure use of the assigned power management settings. 

In addition, the policies that govern the bureau acquisition process assure that energy efficiency 

is a consideration in all equipment purchases. 

Electronic Stewardship and Data Centers 

TTB extensively employs green technologies to reduce its energy consumption. Through the 

success of the server virtualization program, TTB has targeted a 50 percent reduction in the 

physical server footprint. In addition, TTB deploys highly efficient computer room air 

conditioning, programmable thermostats, and Energy Star servers are procured when possible. 

Pollution Prevention & Waste Elimination 

TTB uses environmentally sound management practices in disposing of its assets. In FY 2010, 

TTB recycled 23,574 pounds of electronics and reused or recycled 100 percent of its surplus or 

End-of-Life electronics by working with UNICOR and qualified vendors. TTB also purchases 

office supplies made from post-consumer materials. Finally, TTB laboratories operate an 

Ethanol Waste Recycling Program that recycles pure ethanol from samples submitted to the 

National Laboratory Center and uses the recycled denatured alcohol as a fuel mix for the 

building’s power generator. 

1B – Program History and Future Outlook

TTB has two budget activities that focus on collecting the revenue rightfully due the federal 

government and ensuring alcohol beverage products meet regulatory standards. 

Collect the Revenue - This activity collects alcohol, tobacco, firearms, and ammunition excise 

taxes. These products generate nearly $24 billion in tax revenue annually, making TTB the third 

largest tax collection agency in the federal government. 

The excise taxes collected by TTB come from roughly 7,100 businesses that had operations 

resulting in tax payments in a given year. Members of the regulated industries paying excise 

taxes are distilleries, breweries, bonded wineries, bonded wine cellars, manufacturers of cigarette 

papers and tubes, manufacturers of tobacco products, and manufacturers and importers of 

firearms and ammunition. Approximately 200 of the largest taxpayers account for about 98 

percent of the annual excise tax collected. 

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Fostering voluntary compliance is a primary tax administration strategy and, to support this 

objective, the bureau is working toward allowing TTB permittees and taxpayers to file all 

payments, returns, and applications online with TTB’s National Revenue Center. The FY 2012 

President’s Budget enables the continuation of efforts to provide the most effective and efficient 

system for the collection of all revenue that is rightfully due, eliminate or prevent tax evasion 

and other criminal conduct, and provide high quality service while imposing the least regulatory 

burden.

The investments in this activity resulted in the following performance highlights and 

accomplishments during FY 2010: 

• Collected approximately $24 billion in excise taxes, interest, and other revenues from 

alcohol, tobacco, firearms, and ammunition industries. The bureau collected $478 for every 

$1 expended on collection activities; 

• Collected roughly $9 million in additional floor stocks tax due from the manufacturers, 

importers, wholesalers, and retailers of tobacco products as a result of the tax rate increase 

passed under the Children’s Health Insurance Program Reauthorization Act of 2009 

(CHIPRA); 

• Achieved a 94 percent voluntary compliance rate among taxpayers who paid greater than 

$50,000 in annual excise taxes, measured in terms of timely remittance of tax payments. 

TTB’s educational outreach efforts at industry seminars and premises, and improvements in 

online filing options, assisted in this effort; 

• Processed $387 million in cover-over payments to Puerto Rico and the U.S. Virgin Islands. 

Federal excise taxes collected on all imported rum, and on rum produced in Puerto Rico and 

the Virgin Islands and subsequently brought into the United States, are “covered-over” (or 

paid into) the treasuries of Puerto Rico and the Virgin Islands; 

• Processed $298 million in drawback claims. Under current law, persons who use 

nonbeverage alcohol in the manufacture of medicines, food products, flavors, extracts, or 

perfume and other non-potable products may be eligible to claim drawback of excise taxes 

paid on distilled spirits used in their products; 

• Analyzed beverage alcohol and tobacco product samples to assign or verify a tax 

classification. For this purpose, TTB analyzed roughly 1,000 beverage alcohol samples 

associated with pre-import evaluations, the 5010 tax credit, and enforcement activities. 

Another 375 tobacco product samples were analyzed to ensure products were appropriately 

classified for tax purposes; and 

• Completed targeted field work of 145 audits and roughly 340 revenue-related investigations 

that resulted in the identification of $8 million in additional tax, penalties, and interest. 

TTB’s field presence also has a deterrent effect that promotes voluntary tax compliance from 

industry members. 

 

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The following displays the historical collections at TTB from FY 2001 to 2010 by revenue type: 

Excise Tax and Other Collections by Fiscal Year

Dollars in Thousands 

Fiscal

Year Alcohol Tobacco FAET SOT FST Other Total

2001 6,674,425 $ $ 7,119,726 $ 175,959 $ 103,610 $ 528 $ 168 $ 14,074,416

2002 6,889,401 7,763,652 205,027 101,893 115,609 159 15,075,741

2003 6,910,631 7,380,807 193,414 103,781 1,628 - 14,590,261

2004 6,995,366 7,433,852 216,006 100,562 - 359 14,746,145

2005 7,074,076 7,409,608 225,818 10,190 9 141 14,719,842

2006 7,182,940 7,350,058 249,578 2,895 638 146 14,786,255

2007 7,232,138 7,194,081 287,835 2,808 - 32 14,716,894

2008 7,420,576 6,851,705 312,622 448 - 634 14,585,985

2009 7,424,292 11,548,504 452,693 1,192,375 272 970 20,619,106

2010 7,476,789 15,913,479 360,813 300 8,558 180 23,760,119

Average $ 7,128,063 $ 8,596,547 $ 267,977 $ 42,676 $ 131,935 $ 16,167,476 279 $ 

FAET - Firearms and Ammunition Excise Tax SOT - Special Occupational Tax FST - Floor Stock Tax Other - Suspense Account

Note: Tobacco revenue increased in 2009 as a result of the passage of the Chidren’s Health Insurance Program 

Reauthorization Act (CHIPRA) legislation, which increased the tax rate on tobacco products. Also, legislation was 

enacted in July 2005 that repealed the SOT for all alcohol taxpayers. The SOT for tobacco permitees remains intact. 

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2005 2006 2007 2008 2009 2010

Dollars (In Millions)

Tax Collections by Commodity

Tobacco Alcohol Firearms

67%

31%

2%

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Alcohol Beverage Tax Collections 

The alcohol beverage industry in the United States pays $7.5 billion in federal excise taxes each 

year and also provides a source of tax revenue for state and local governments. Economic 

forecasts predict continued modest growth in the alcohol industry, and taxes collected on alcohol 

beverages are expected to continue to rise throughout the period of FY 2011 – FY 2012. TTB 

expects that the increase in new alcohol businesses will be most prominent in the number of 

wineries, craft breweries, and craft distilleries. 

Tobacco Tax Collections and Floor Stocks Tax 

In FY 2010, TTB tobacco excise tax collections spiked to an historic high of $15.9 billion as a 

result of a full year of collections under the increased tax rate imposed by the Children’s Health 

Insurance Program Reauthorization Act of 2009 (CHIPRA). This legislation provided for a tax 

increase on all tobacco products (except large cigars), and cigarette papers and cigarette tubes, 

effective April 1, 2009. 

CHIPRA also imposed a floor stocks tax on tobacco products, a one-time excise tax placed on 

commodities subject to a tax increase that is equal to the difference between the new tax rate and 

the previous rate. The last floor stocks tax on tobacco enacted by Congress was in 2002. Floor 

stocks tax collections for FY 2009 totaled $1.2 billion and represent collections from hundreds of 

thousands of wholesaler and retailer dealers (who do not hold a permit with TTB) and 

manufacturers and importers (who are required to hold a TTB permit). In FY 2010, TTB 

continued its enforcement of the floor stocks tax, identifying tobacco wholesalers and retailers 

that did not file and/or pay floor stocks tax or significantly underpaid this tax. TTB collected 

nearly $9 million of additional floor stocks tax plus penalties and interest. TTB continues its 

floor stocks tax enforcement efforts and is finding many wholesalers that appear to be willfully 

not reporting or underreporting their tobacco inventory and associated tax payments. TTB will 

continue to audit high risk non-filers and under-filers of floor stocks tax. 

Firearms and Ammunition Excise Tax (FAET) Collections 

Firearms and ammunition excise taxes are remitted to the Fish and Wildlife Restoration Fund 

under provisions of the Pittman-Robertson Act of 1937. The U.S. Fish and Wildlife Service, 

which oversees the fund, apportions the money to state governments for wildlife restoration and 

research, and hunter education programs. Federal excise tax collections on firearms and 

ammunition have increased from $193 million in FY 2003 to $361 million in FY 2010, an 

increase of $168 million over the past seven years, or an 87 percent growth in federal FAET 

revenues. The increase in reported tax revenue can be attributed to industry growth, effective 

outreach and collection initiatives at the bureau, and the field presence of TTB’s auditors, which 

continues to promote voluntary taxpayer compliance. 

Protect the Public - This activity ensures the integrity of the alcohol and tobacco industries and 

of beverage alcohol products found in the marketplace, and regulates roughly 53,000 alcohol and 

tobacco businesses. TTB enforces federal laws related to the issuance of permits to industry 

members and the production, importation, exportation, labeling, advertising, and marketing of 

alcohol products. 

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The investments in this budget activity have resulted in the following performance highlights and 

accomplishments during FY 2010: 

• Approved 102,500 of the 132,600 COLA applications received; the remaining 30,100 (23 

percent) were rejected, returned for correction, withdrawn, or expired. About 79 percent of 

COLA applications were filed electronically through COLAs Online. This proprietary TTB 

system has been in operation since 2003; 

• Processed 5,770 original and 18,230 amended permits. TTB averaged 65 days to process 

original permit applications. TTB protects consumers by screening permit applicants to 

ensure only qualified persons engage in operations in the regulated industries; 

• Evaluated about 6,700 beverage alcohol formulas and analyzed about 2,300 alcohol beverage 

samples in support of audits and investigations, as well as the product integrity, pre-import, 

Alcohol Beverage Sampling Program, 5010 tax credit, and consumer complaints programs; 

• Issued 190 cease and desist letters to tobacco importers operating without permits. Through 

its effective information sharing relationship with U.S. Customs and Border Protection, TTB 

was able to compare import data in the customs International Trade Data System with permit 

information in TTB’s Integrated Revenue Information System and determined that 15 

percent of entities reporting importations of tobacco products had done so without a 

permit. TTB’s issuance of cease and desist letters, and appropriate follow up activities, 

ensured that the responsible parties ended operations or obtained a permit; and 

• Initiated more than 700 field investigations of industry members regarding permit 

applications, consumer complaints, trade practice violations, and product integrity 

verifications. Included are high-risk permit applications to meet TTB’s public protection 

objectives.

TTB Permitting Process

TTB’s vision for the Permits Online investment is to provide a secure, web-based solution that 

allows members of the alcohol and tobacco industries to electronically submit applications for 

permits to operate. Applicants who plan to produce finished distilled spirits, wines, malt 

beverages, and tobacco products, and persons wishing to operate businesses such as alcohol 

wholesalers, alcohol importers, tobacco importers, specially denatured spirits users and dealers, 

tax-free alcohol users, alcohol fuel plants, tobacco processors, and tobacco export warehouses, 

must submit original and amended permit applications. The National Revenue Center currently 

processes original application packets for 23 types of permits/registrations. 

New or existing industry members file these application packets to request permission to 

commence a new regulated industry operation, or to update critical industry member information 

such as trade names and changes in control. Over the past several years, the volume of paper 

applications has increased making it difficult to maintain current service levels. The bureau 

purchased a commercial off-the-shelf software package that will be the core of the electronic 

system to automate the submission process for all permit applications. TTB engaged in an 

intensive development effort in FY 2010, and devised a schedule for the phased release of the 

Permits Online system. The system will be deployed in stages, with the initial release targeted 

for FY 2011, and subsequent releases scheduled through FY 2012. Once the commercial product 

is fully implemented, industry can expect reduced processing time, electronically guided 

assistance through the application process, improved communications with TTB, and an overall 

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reduction in mailing and materials costs. The FY 2012 President’s Budget includes a staff 

reduction of 3 FTE as a result of the efficiencies gained by the introduction of this technology. 

Specific Challenges in FY 2012 

Tobacco Product Diversion 

Given the increased rate of tax (since 2009) upon tobacco products, there is an increased 

incentive to evade the tax to gain an illegal profit. Tobacco diversion refers broadly to the 

movement of tobacco products into domestic commerce without the payment of taxes due. 

Diversion schemes include: 

• Tobacco products are removed from the manufacturer’s premises in excess of the quantity 

reported to TTB, thus evading the tax on the unreported quantity of products removed; 

• Tobacco products are removed from the manufacturer’s premises for export (which is a 

removal not subject to federal excise tax) and either the manufacturer or an export warehouse 

proprietor diverts the products into domestic commerce before export, thus illegally avoiding 

tax payment; 

• Tobacco products are removed from the manufacturer’s premises without tax payment for 

export, are exported, and are smuggled back into the United States without the required 

importation entry and associated tax payment; 

• Tobacco products are smuggled from abroad into the United States, disguised and declared as 

something other than tobacco products, or are declared as a smaller quantity than actually 

imported, thus illegally evading the applicable tax payment requirements; 

• Tobacco products are sold by mail order, phone, and over the Internet from domestic and 

foreign vendors and are delivered directly to the consumer, thus bypassing applicable federal 

and/or state tax payment requirements; and 

• Tobacco products are produced by a manufacturer operating without a permit and are 

removed for domestic consumption without the payment of applicable taxes. 

TTB has been involved with cases that touch on each of these diversion schemes and has either 

addressed them administratively (where permittees have been involved) or worked with state or 

other federal agencies to address the unlawful conduct and to collect the tax due. 

The Department of the Treasury Report to Congress on Federal Tax Receipts Lost Due to Illicit 

Trade and Recommendations for Increased Enforcement (“Report”), dated February 4, 2010, 

presented a study estimating the amount of federal tax receipts lost as a result of tobacco 

diversion. The Report also made several recommendations that, taken together and assuming 

appropriate resources to implement, TTB believes would reasonably be expected to limit tobacco 

diversion. The study emphasized that the substantial uncertainty surrounding the degree of 

underreporting of cigarette consumption in survey data necessarily results in uncertainty about 

the magnitude of the federal tax receipts lost due to cigarette diversion. The Bureau will 

continue to conduct this study to analyze post-CHIPRA revenue loss once data regarding 

cigarette consumption rates for 2009 and 2010 become available. 

Additionally, since the enactment of CHIPRA, TTB has seen a number of changes in the tobacco 

products industry, apparently in response to the new incentives created by the different tax rates 

TTB - 10 
imposed on the tobacco product categories. Those industry trends have included shifts within 

the industry in terms of the types of tobacco products removed from manufacturing premises for 

commercial distribution, specifically in regard to small and large cigars, and pipe tobacco and 

roll-your-own tobacco products. This shift can be attributed to consumers consciously 

purchasing lower-tax tobacco products. 

In FY 2010, TTB was provided $3 million in two-year (FY 2010-2011) funding that will expire 

on September 30, 2011. Congress specified that the funds would be for the hiring, equipping, 

and training of special agents and related support personnel. To assist the bureau with enforcing 

its criminal jurisdiction, TTB entered into an interagency agreement for the services of law 

enforcement agents on a reimbursable basis from the Internal Revenue Service Criminal 

Investigation division. The TTB criminal cases involving alcohol and tobacco diversion activity 

are in the investigative stage and, due to their complex nature, will take time to develop and 

bring to closure. TTB expects measurable results from the current caseload, and has identified 

additional leads for potential criminal referrals. 

Alcohol Fuel Plants 

TTB has issued approximately 1,700 alcohol fuel plant permits, which it regulates as distilled 

spirits plants. The establishment of these new plants creates new challenges because of the 

possibility for significant revenue losses due to the unlawful diversion of alcohol. The Energy 

Independence and Security Act of 2007 mandates the use of 36 billion gallons of renewable fuel 

per year by 2022. In comparison, total U.S. consumption of beverage distilled spirits is about 

420 million gallons per year – and beverage spirits contain less than half the ethanol that is in 

alcohol fuel. Most alcohol fuel production comes from fewer than 150 large plants, but hundreds 

of smaller plants have applied for TTB permits in each of the last few years. 

Succession Planning 

Succession planning is high on the list of TTB’s strategic priorities. TTB could lose 

approximately 30 percent of its workforce by 2012 due to retirements and other attrition. To 

mitigate these losses, TTB continues to use the personnel interventions identified in the Pay 

Demonstration Project to enable the bureau to improve its capacity to recruit, develop, and retain 

high-caliber employees. Continuation of this authority is key to closing skill gaps in mission 

critical occupations and is requested for an additional year in the FY 2012 budget. 

Rulemaking 

TTB’s regulatory actions will support its mission objectives to collect the revenue and protect the 

public. The bureau will work on a number of regulatory projects in FY 2012, and several key 

regulatory initiatives are detailed below. 

Key Regulatory Initiatives

Collect the Revenue and Protect the Public - Modernization of Title 27, Code of Federal 

Regulations. In FY 2012, TTB will continue to pursue its multi-year program of 

modernizing its regulations in title 27 of the Code of Federal Regulations. This program 

involves updating and revising the regulations to be more clear, current, and concise, with an 

emphasis on the application of plain language principles. Modernizing the regulations will 

ultimately result in greater compliance by industry members, thus protecting both the 

TTB - 11 
revenue and the public, as well as cost savings to TTB through the use of more efficient 

regulatory processes. In FY 2010, TTB drafted an advance notice of proposed rulemaking on 

Part 25, Beer regulations and expects to publish it in early FY 2011. 

Collect the Revenue--Alcohol Fuel Plants. In FY 2012, TTB intends to publish amendments 

to the alcohol fuel plant regulations, in recognition of the significant growth in this industry 

segment. TTB anticipates these changes would include updated procedures for producers of 

distilled spirits intended for fuel use that will provide TTB with improved methods to protect 

the revenue, and also clarify or ease certain operational requirements.

The regulatory proposal will provide for more frequent reporting to TTB by larger alcohol 

fuel plants to enable TTB to better protect the revenue. TTB will also propose to remove the 

recordkeeping requirement for samples used at the alcohol fuel plant, and will provide 

clarification as to the disposition of distiller’s grain and other bi-products that result from 

ethanol production. 

Collect the Revenue - Simplify Reporting Requirements for Distilled Spirits Plants. TTB will 

need to undertake a rulemaking project to revise its regulations related to reporting 

requirements for distilled spirits plants (DSP). In order to realize the anticipated savings 

from staff reductions, as incorporated into the FY 2012 budget request, TTB must publish a 

final rule that updates the regulations to consolidate the required monthly operations reports 

for non-industrial DSP.

 

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Section 2 – Budget Adjustments and Appropriation Language 

2.1 – Budget Adjustments Table 

Dollars in Thousands 

Alcohol and Tobacco Tax and Trade Bureau FTE Amount

FY 2010 Enacted 535 $103,000

FY 2011 Annualized CR Level 535 $103,000

Changes to Base: 

Adjustment to Reach Policy Level: 12 $2,571 

Adjustment to Reach FY 2011 President's Policy 12 $2,571 

Maintaining Current Levels (MCLs): - $832 

Maintaining Current Levels - $832 

Efficiencies, Savings & Base Reductions: (45) ($8,525) 

Audits, Investigations, Outreach & Trade Facilitation (15) ($1,584) 

Law Enforcement/Special Agents (10) $0 

Licensing and Registration Fees Initiative (12) ($5,500) 

New Regulations to Simplify Reporting Requirements (3) ($300) 

Overhead/Operating (Reduced Staffing/Overtime/Travel/Contracts, etc.) (2) ($841) 

Paperless Initiative (Permits Online) (3) ($300) 

Subtotal FY 2012 Changes to Base (33) ($5,122) 

Total FY 2012 Base 502 $97,878

Total FY 2012 Request 502 $97,878

2A – Budget Increases and Decreases Description 

Adjustment to Reach Policy Level ......................................................... +$2,571,000 / +12 FTE

Adjustment to Reach FY 2011 President's Policy +$2,571,000 / +12 FTE 

Adjustment from the FY 2011 Annualized Continuing Resolution (CR) Rate to reach the FY 

2011 President's Policy Level. The President's Policy Level is equal to the FY 2011 President's 

Budget as adjusted for the proposed pay freeze. 

Maintaining Current Levels (MCLs) ......................................................... +$832,000 / +0 FTE

Maintaining Current Levels +$832,000 / +0 FTE 

Funds are requested for inflation adjustments in non-labor expenses such as GSA rent 

adjustments, postage, supplies and equipment and health benefits and the increase in Federal 

Employee Retirement System participation. No inflation adjustment is requested for pay in FY 

2012. 

Efficiencies, Savings & Base Reductions ................................................ -$8,525,000 / -45 FTE

Audits, Investigations, Outreach & Trade Facilitation -$1,584,000 / -15 FTE 

Savings realized from a reduction of staff, combined with an improved strategy for tax and 

regulatory enforcement that focuses on the areas that present the highest revenue risk, and a 

reinvented approach to industry outreach and international trade activities. 

Law Enforcement/Special Agents +$0 / -10 FTE 

Reduction of 10 FTE due to the expiration of two-year funding (FY 2010-2011) for law 

enforcement agents and related support personnel whose focus was on criminal activities 

surrounding the alcohol and tobacco commodities. 

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Licensing and Registration Fees Initiative -$5,500,000 / -12 FTE 

Reduction due to the exclusion from the FY 2012 Presidents Budget of a licensing and 

registration fee program, which would have required the collection of annual fees from alcohol 

and tobacco industry members to fund TTB operations. 

New Regulations to Simplify Reporting Requirements -$300,000 / -3 FTE 

Savings realized from simplifying the reporting requirements for distilled spirits plants (DSP) by 

updating the regulations to consolidate the required monthly operations reports for non-industrial 

DSP. 

Overhead/Operating (Reduced Staffing/Overtime/Travel/Contracts, etc.) -$841,000 / -2 FTE 

Savings realized from the reduction of operating costs such as overtime, travel, supplies, GSA 

rent, equipment, software, and the reduction of management staff. 

Paperless Initiative (Permits Online) -$300,000 / -3 FTE 

Savings realized from staffing reduction enabled by efficiencies gained from the Permits Online 

electronic filing system due to processing time reduction and the streamlining of business 

processes. 

 

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2.2 – Operating Levels Table 

Dollars in Thousands 

Alcohol and Tobacco Tax and Trade 

Bureau

FY 2010

Enacted

FY 2011

Annualized CR 

Level

Proposed 

Reprogram

mings

FY 2011

Proposed Operating 

Level

FY 2012 

Request

FTE 535 535 - 535 502

Object Classification

11.1 - Full-time permanent $47,375 $47,375 $0 $47,375 $45,389

11.5 - Other personnel compensation $794 $794 $0 $794 $785

12 - Personnel benefits $11,706 $11,706 $0 $11,706 $11,582

21 - Travel and transportation of 

persons $3,508 $3,508 $0 $3,508 $2,990

22 - Transportation of things $102 $102 $0 $102 $96

23.1 - Rental payments to GSA $4,796 $4,796 $0 $4,796 $4,763

23.3 - Communication, utilities, and 

misc charges $5,132 $5,132 $0 $5,132 $5,178

24 - Printing and reproduction $388 $388 $0 $388 $393

25.2 - Other services $16,628 $16,628 $0 $16,628 $16,548

25.3 - Other purchases of goods and 

services from Govt. accounts $7,159 $7,159 $0 $7,159 $6,420

26 - Supplies and materials $740 $740 $0 $740 $636

31 - Equipment $4,645 $4,645 $0 $4,645 $3,071

42 - Insurance claims and indemnities $27 $27 $0 $27 $27

Total Budget Authority $103,000 $103,000 $0 $103,000 $97,878

Budget Activities

Collect the Revenue $53,000 $53,000 $0 $53,000 $48,939

Protect the Public $50,000 $50,000 $0 $50,000 $48,939

Total Budget Authority $103,000 $103,000 $0 $103,000 $97,878

 

TTB - 15 
2.3 – Appropriations Detail Table 

Dollars in Thousands 

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Appropriated Resources:

Collect the Revenue 268 $49,553 268 $53,000 268 $53,000 251 $48,939 -6.34% -7.66%

Protect the Public 267 50,190 267 50,000 267 50,000 251 48,939 -5.99% -2.12%

Subtotal New Appropriated Resources 535 $99,743 535 $103,000 535 $103,000 502 $97,878 -6.17% -4.97%

Other Resources:

Offsetting Collections - Reimbursable 15 4,234 15 4,234 15 3,050 15 2,997 0.00% -29.23%

Subtotal Other Resources 15 $4,234 15 $4,234 15 $3,050 15 $2,997 0.00% -29.23%

Total Resources Available for Obligation 550 $103,977 550 $107,234 550 $106,050 517 $100,875 -6.00% -5.93%

Note: The obligations related to the 2-year FY 2010/2011 funding in the amount of $3 million for the hiring, training and equipping of special agents and related support 

personnel was outsourced in the first quarter of FY 2011 with another government agency.

% Change 

FY 2010 to FY 2012

FY 2012 

Request

Resources Available for Obligation FY 2010 

Obligations

FY 2010 

Enacted

 FY 2011 

Annualized CR 

Level

2B – Appropriations Language and Explanation of Changes 

DEPARTMENT OF THE TREASURY 

ALCOHOL AND TOBACCO TAX AND TRADE BUREAU 

Federal Funds 

SALARIES AND EXPENSES:

For necessary expenses of carrying out section 1111 of the Homeland 

Security Act of 2002, including hire of passenger motor vehicles, 

$97,878,000; of which not to exceed $6,000 for official reception and 

representation expenses; not to exceed $50,000 for cooperative 

research and development programs for laboratory services; and 

provision of laboratory assistance to State and local agencies with or 

without reimbursement. 

Treasury Administrative Provisions:

Section 122(g)(1) of Public Law 105–119 (5 U.S.C. 3104 note), is 

further amended by striking " 12 years'' and inserting " 14 years''.

TTB proposes to 

continue the Pay 

Demonstration 

Project by amending 

the language to 

extend the program 

for one additional 

year. 

2C – Legislative Proposals 

Extend Pay Demonstration Project

TTB proposes to continue the Pay Demonstration Project (Pay Demo) by amending the General 

Provision language to extend the project for one additional year. This project was established to 

enhance Treasury’s ability to effectively recruit and retain highly qualified employees. Pay 

Demo has been extended every year since it was first established in FY 1999, and has been a 

successful intervention tool in the recruitment and retention of critical staff positions. 

• The continuation of the Pay Demo authority has proven to be an effective recruitment 

strategy that enables the bureau to timely fill its positions with the right people, with the right 

skills, minimizing loss and skill gaps caused by an aging workforce and employee turnover; 

TTB - 16 
• The Pay Demo authority fosters a results-oriented organizational culture since the 

employees’ compensation is based upon the level of performance, therefore, improving the 

bureau’s overall performance; 

• The Pay Demo authority has resulted in a more diverse workforce, with increased 

representation of various groups (e.g., women, persons with disabilities, veterans, and 

persons from different age groups) across all occupations and band/grade groupings under 

the authority. 

TTB - 17 
Section 3 – Budget and Performance Plan 

This table lists all FY 2012 resources by strategic goal, objective and outcome outlined in the FY 

2007-2012 Treasury Department Strategic Plan. The Treasury Strategic Plan provides a 

description of what the agency intends to accomplish over the next five years. 

For detailed information about the FY 2007-2012 Treasury Strategic Plan, please go 

to: http://www.treasury.gov/about/budget‐performance/strategic‐plan/Pages/index.aspx

3.1 – Budget by Strategic Outcome 

Dollars in Thousands 

Treasury Strategic Outcome FY 2010 

Enacted

FY 2011 

Annualized 

CR Level

FY 2012 

Request

% Change 

FY10 to FY12

 Strong U.S. economic competitiveness 55,117 54,525 50,437 -8.49% 

 Revenue collected when due through a fair and uniform 

application of the law 52,117 51,525 50,438 -3.22% 

Total $107,234 $106,050 $100,875 -5.93%

3A - Collect the Revenue ($48,939,000 from direct appropriations, and $1,499,000 from 

reimbursable programs): This budget activity includes all tax processing, verification, 

enforcement, and outreach efforts related to tax administration performed by TTB. Collect the 

Revenue includes three programs: 1) Alcohol and Tobacco Tax Collections, 2) Firearms and 

Ammunition Excise Tax Collections, and 3) Outreach and Voluntary Compliance. Principal 

business activities within these programs include: 

• Tax Collection, Claims, Refunds, and Classification, which involves preparing taxpayer 

notices and assessments, processing claims and settlement agreements, and assigning a tax 

classification to a product based on regulatory standards; 

• Tax Verification, Audits, and Investigations, which includes the reconciling and auditing of 

tax returns and reports of business operations; on-site audits of alcohol, tobacco, firearms, 

and ammunition industry members; investigating criminal allegations or indications of tax 

fraud; conducting compliance investigations of permittees who have substantial potential for 

tax liability; and initiating adverse actions for willful violations of the Internal Revenue 

Code; and 

• Voluntary Compliance, which supports outreach and education efforts for members of the 

regulated industries, and includes preparing regulatory guidance, web site postings, and 

newsletters; participating in and/or hosting conferences and seminars; and industry and state 

liaison activities. 

Strategies used to collect the revenue rightfully due the federal government focus on identifying 

any gaps in tax payment from illegal entities and individuals operating outside the excise tax 

system; developing a balanced field approach of audits and investigations that targets noncompliant industry members; and establishing an identifiable presence within the industry that 

encourages voluntary compliance. TTB uses an interagency approach in applying these 

enforcement strategies that involves cooperation with local, state, federal, and foreign 

government counterpart agencies to maximize the deterrent impact of enforcement actions. 

TTB - 18 
Offsetting Collections............................................................Total $1,499,000 

Non-Federal Sources (Puerto Rico).........................................$1,450,000 

Federal Sources (Laboratory Services).........................................$17,000 

Federal Sources (IT Network Services)........................................$32,000 

The non-federal reimbursable funds cover the costs associated with the functioning and support 

of the Puerto Rico office, and are paid from the “cover-over” (return), which is offset from the 

cover-over taxes collected in the United States. The bureau collects a nominal amount of 

reimbursable funding for lab services performed to support criminal investigations at the Bureau 

of Alcohol, Tobacco, Firearms, and Explosives. Also, the bureau collects reimbursable funding 

for the cost of providing information technology network services for the Community 

Development Financial Institutions Fund. 

3.2.1 Collect the Revenue Budget and Performance Plan 

Collect the Revenue Budget Activity

Resource Level FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Obligated Obligated Enacted Annualized 

CR Level

Request

 Appropriated Resources $46,758 $50,524 $53,000 $53,000 $48,939

 Reimbursable Resources $1,878 $2,576 $2,117 $1,525 $1,499

Total Resources $48,636 $53,100 $55,117 $54,525 $50,438

Budget Activity Total $48,636 $53,100 $55,117 $54,525 $50,438

Measure FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Actual Actual Actual Target Target

Amount of Revenue Collected Per Program Dollar (E) 313.0 427.0 478.0 400.0 410.0

Percent of Voluntary Compliance from Large Taxpayers in Filing 

Tax Payments Timely and Accurately (In Terms of Revenue) (Oe)

94.0 94.0 94.0 92.0 94.0

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, M - Management/Cust. Satisfaction, 

DISC - Discontinued, and B - Baseline

Description of Performance: In FY 2010, TTB met all of its performance measures under the 

Collect the Revenue budget activity, and showed continued improvements in performance levels. 

The amount of revenue collected per program dollar measure quantifies the efficiency of the tax 

collection program and, in FY 2010, TTB reported a return on investment of $478 for every 

dollar spent on collection activities. In just two years, the return on investment for the Collect 

the Revenue program increased by more than 50 percent, principally because of the higher 

federal excise tax rate imposed on tobacco products under the February 2009 CHIPRA 

legislation. The bureau used Congressional Budget Office revenue projections for increased 

tobacco excise tax collections to determine its targeted performance levels for fiscal years 2010 - 

2012 and, due to ongoing and successful compliance audit and investigation efforts, exceeded 

TTB - 19 
the performance target for FY 2010 by 20 percent. Additionally, through on premises visits to 

industry and targeted post-audit verifications, TTB auditors continued to enforce the collection 

of the tobacco floor stocks tax from the manufacturers, importers, wholesalers, and retailers who 

held tobacco products in inventory at the time of the tax rate increase. This field work resulted in 

nearly $9 million in additional floor stocks tax collections in FY 2010. 

TTB collected nearly $24 billion in federal excise taxes in a highly efficient manner. Key 

performance metrics show that 94 percent of industry members voluntarily file their tax 

payments on or before the scheduled due date. During an economic downturn, this compliance 

rate from business is especially notable, and is a function of TTB’s enforcement presence and the 

service and outreach TTB provides to its industry members. 

3B - Protect the Public ($48,939,000 from direct appropriations, and $1,498,000 from 

reimbursable programs): This budget activity funds the programs that ensure the integrity of 

products and industry members in the marketplace, promote compliance with laws and 

regulations by TTB-regulated businesses, and provide information to the public as a means to 

prevent consumer deception. Protect the Public includes four programs: 1) Permits and Business 

Assurance; 2) Advertising, Labeling, and Product Safety; 3) Trade Facilitation; and 4) Outreach 

and Voluntary Compliance. Principle business activities within these programs include: 

• Business Integrity, which involves enforcing compliance with federal laws related to the 

issuance of permits to those who wish to operate in the alcohol, tobacco, firearms, and 

ammunition industries; 

• Product Integrity, which includes reviewing alcohol beverage label applications; evaluating 

alcohol beverage product advertisements; reviewing alcohol beverage formula submissions; 

evaluating specially denatured alcohol and other nonbeverage alcohol formulas to verify the 

tax drawback claim of the applicant; investigating incidents of suspected unsafe conditions or 

product deficiencies related to the production and labeling of alcohol beverages; and testing 

samples of beverage alcohol sold at the retail and producer levels to ensure that these 

products meet formulation and labeling requirements, do not contain unauthorized substances 

or contaminants, and are properly classified for tax purposes; and 

• Market Integrity, which includes monitoring the trade practices of the alcohol industry and 

taking enforcement actions on violations, monitoring and reviewing international trade in 

alcohol beverages to identify trade barriers and incidents of international fraud and 

contaminated products, and promoting international agreements on product integrity. 

TTB works with industry, foreign and state governments, and other interested parties to reduce 

the burden of compliance with regulatory requirements and to maintain the appropriate level of 

oversight to ensure public safety. Industry education, interagency partnerships, international 

cooperation, and open communication are paramount strategies in facilitating compliance with 

regulatory product and trade requirements. 

U.S. exports of alcohol beverages totaled more than $2 billion in 2009. TTB seeks to promote 

U.S. exports by facilitating industry compliance with foreign requirements and by working with 

foreign regulators to reduce barriers to trade. In FY 2010, TTB issued over 10,000 export 

TTB - 20 
certificates for beer, wine, and distilled spirits. Without these certificates, which are only issued 

by TTB, U.S. producers of alcohol beverages cannot sell their products in major markets 

abroad. Further, through its international outreach, TTB has arranged for the elimination or 

reduction of certification requirements for wine exported to the European Union, Argentina, 

Australia, Canada, Chile, Georgia, New Zealand, and South Africa. 

Offsetting Collections..........................................................Total $1,498,000 

Non-Federal Sources (Puerto Rico)........................................$1,450,000 

Federal Sources (Laboratory Services)........................................$17,000 

Federal Sources (IT Network Services)........................................$31,000 

The non-federal reimbursable funds cover the costs associated with the functioning and support 

of the Puerto Rico office, and are offset from the cover-over taxes collected in the United States. 

Also, the bureau collects a nominal amount of reimbursable funding for lab services performed 

to support criminal investigations being conducted at the Bureau of Alcohol, Tobacco, Firearms, 

and Explosives. Also, the bureau collects reimbursable funding for the cost of providing 

information technology network services for the Community Development Financial Institutions 

Fund. 

3.2.2 Protect the Public Budget and Performance Plan 

Protect the Public Budget Activity

Resource Level FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Obligated Obligated Enacted Annualized 

CR Level

Request

 Appropriated Resources $46,758 $48,541 $50,000 $50,000 $48,939

 Reimbursable Resources $1,878 $2,578 $2,117 $1,525 $1,498

Total Resources $48,636 $51,119 $52,117 $51,525 $50,437

Budget Activity Total $48,636 $51,119 $52,117 $51,525 $50,437

Measure FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Actual Actual Actual Target Target

Average Number of Days to Process an Original Permit 

Application at the National Revenue Center (E)

64.0 64.0 65.0 72.0 65.0

National Revenue Center (NRC) Customer Satisfaction Survey 

Results (%) (Oe)

90.0 89.0 89.0 85.0 85.0

Percent of Electronically Filed Certificate of Label Approval 

Applications (E)

62.0 74.0 79.0 81.0 83.0

Percentage of Importers Identified by TTB as Illegally Operating 

without a Federal Permit (%) (Oe)

22.0 15.0 15.0 19.0 14.0

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, M - Management/Cust. Satisfaction, 

DISC - Discontinued, and B - Baseline

TTB - 21 
TTB - 22 

Description of Performance: In FY 2010, TTB met or exceeded its targeted performance for 

each of its Protect the Public measures. 

The bureau reported increases in the percent of electronically filed COLA applications, which in 

FY 2010 reached 79 percent of all applications. The ongoing rise in electronic filing is due to 

successful industry outreach events sponsored by the bureau, and system enhancements that 

simplify the filing process for industry members. TTB has set aggressive performance targets 

for fiscal years 2011 and 2012 and will effectively deploy its resources to meet these 

performance goals. 

The NRC customer survey measures satisfaction with application and claims processing times 

and the level of service provided to the industry. The survey solicits feedback on the level of 

service provided to applicants for an original or amended permit, and those industry members 

who file a claim to recover taxes paid on nonbeverage alcohol or overpayments of tax. TTB 

exceeded its target of a sustained score of 85 percent on customer satisfaction for permit 

application and claims processing, and achieved a composite score of 89 percent in FY 2010. 

Planned service enhancements, including the online filing solution for original and amended 

permit applications which will be released in FY 2011, will contribute to the bureau continuing 

to meet its targeted performance level. This target factors in anticipated efficiencies from 

realignments to staff and improvements to technology and business processes. 

TTB expects automation efforts that commenced in FY 2011 to expedite permit processing 

times. With full system functionality for Permits Online slated for deployment in 2012, and 

considering the requisite transition and training period for industry members, TTB anticipates 

achieving considerable improvements in processing times beginning in the latter quarters of FY 

2012. Once this process improvement is implemented, and with resources directed toward 

promoting Permits Online and training industry on its use, the bureau expects to achieve and 

sustain a 65-day average turnaround time in permit processing in FY 2012. This will support the 

government’s efforts in facilitating economic growth, as permits must be issued before new 

businesses can commence operations. 

TTB continues its enforcement of federal permit requirements, targeting entities identified as 

importing cigarettes and other tobacco products without a TTB permit. By monitoring the U.S. 

Customs and Border Protection’s International Trade Data System, and comparing import data 

against the permittees on file with TTB, the bureau is able to identify and take action against 

those entities engaging in unlawful operations. The bureau exceeded its targeted performance 

level for FY 2010. 

For detailed information about each performance measure, including definition, verification and 

validation, please go to: http://www.treasury.gov/offices/management/dcfo/accountabilityreports/
Section 4 – Supporting Materials 

4A – Human Capital Strategy Description 

The TTB Human Capital Strategic Plan aligns with the TTB Strategic Plan and Treasury Human 

Capital Strategic Plan, and documents strategies to improve skill and competency gaps, 

workplace demographics, succession planning, workforce management, and performance 

measurement efforts. The model for strategically assessing the skills gap for future years is 

predicated on assumptions regarding future changes in the workforce, including retirement 

eligibility rules and rates of attrition. 

One of TTB’s key indicators of how successfully it manages human capital declined compared to 

prior year results. Expanding mission requirements from the CHIPRA legislation, with short 

timeframes for implementation, and increased workloads contributed to declines in employee 

satisfaction, as evidenced by the OPM employee survey, FedView. TTB ranked 83rd out of 224 

sub-component agencies on the FY 2010 Best Places to Work in the Federal Government 

rankings, a decline from its 2008 ranking of 7th out of 216. In response to this government-wide 

employee survey, TTB spearheaded an effort to solicit feedback from both employees and 

managers which involved creating processes for feedback loops, engaging employees in the 

decision making process, and leveraging employee talents to meet the bureau’s programmatic 

needs. 

While TTB’s ranking decreased from the prior year survey, the positive response rate on the 

FedView survey compares favorably to the Department of the Treasury and government overall. 

The positive response rate for TTB in all survey categories, with one exception, remained at or 

above the government-wide average. These results can be attributed, in part, to TTB’s use of its 

Pay Demonstration Project (Pay Demo) authority, which provides a number of human capital 

management and compensation flexibilities, and the promotion of telework and alternative work 

schedules. Currently, 56 percent of employees telework on a regular recurring schedule, and 74 

percent of the workforce telework at least on an occasional basis. 

By properly managing its human capital needs, TTB supports the Department of the Treasury’s 

strategic goals of: 

 

• Effectively Managed U.S. Government Finances; and 

• U.S. and World Economies Perform at Full Economic Potential. 

Succession planning is a strategic priority for TTB, especially as it relates to the bureau’s 

mission-critical positions. The bureau could lose approximately 30 percent of its workforce 

between FY 2010 and FY 2012 due to retirements and other attrition. Many of these positions 

are auditors and investigators who enforce compliance from permittees and taxpayers. To 

mitigate these losses, it is vital that the personnel interventions identified in the Pay Demo 

project are available to improve its ability to recruit, develop, and retain high-caliber employees 

in mission-critical positions. The bureau has roughly 130 participants in this project in positions 

such as chemists, industry analysts, auditors, and information technology specialists. The bureau 

also extensively uses federal programs to recruit new employees and increase skill levels such as 

the Presidential Management Fellows Program and other special emphasis hiring. TTB 

TTB - 23 
TTB - 24 

emphasizes employee development through training programs such as the Emerging Leaders 

Program and supports specialized training through TTB-sponsored courses like the Integrated 

Field Operations (InFO) course, which trains new auditors and investigators on legal authorities, 

policies, and specific industry knowledge. 

Interagency and Contract Services

TTB uses the Bureau of Public Debt Administrative Resource Center (BPD ARC), a government 

shared service provider, for the majority of its administrative functions, including financial 

services, human resources, travel, procurement, and timekeeping functions. Outsourcing these 

functions provides a cost savings from economies of scale and allows the bureau to better focus 

resources on its core mission. With this very low rate of administrative overhead, the bureau 

directly hires only those positions necessary to administer policy and provide appropriate 

oversight of the shared service provider. In addition, TTB outsources all IT functions to a 

commercial service provider, directly hiring only positions necessary to administer policy and 

provide appropriate oversight of the IT contractor. 

Wellness

TTB maintains contracts with Federal Occupational Health and with the BPD ARC for employee 

assistance programs and medical services. TTB has a Health Improvement Program that allows 

time for exercise. A multitude of health and wellness services and opportunities are offered to 

employees, including “heart healthy” choices in snack machines; extensive Employee 

Assistance Program services (e.g., substance abuse counseling, smoking cessation programs, 

grief counseling, and stress management); occupational health services (such as immunizations) 

through the Federal Occupational Health program; and participation in federal government 

programs such as FedsGetFit, HealthierFeds, and Health Care Flexible Spending Accounts. TTB 

also publishes a monthly informational bulletin about health and wellness programs. Bureau 

managers coordinate voluntary wellness activities such as creating teams for charity walks. 

Plans are in development to reach the Administration’s goal of 75 percent employee participation 

in wellness programs. 
4.1 – Summary of IT Resources Table 

Dollars in Thousands 

Major IT Investments / Funding Source Budget Activity

FY 2009 

Enacted

FY 2010 

Enacted

% Change 

from FY09 to 

FY10

FY 2011 

Annualized 

CR Level

FY 2012 

Request

No Major Investments $0 $0 N/A $0 $0 Subtotal, Major IT Investments

Collect the 

Revenue/Protect the 

Public $0 $0 N/A $0 $0 

Non-Major IT Investments

Collect the 

Revenue/Protect the 

Public $4,480 $4,480 0.0% $4,480 $5,780 

Infrastructure Investments

Collect the 

Revenue/Protect the 

Public $17,258 $16,260 -5.8% $16,260 $15,128 

Enterprise Architecture

Collect the 

Revenue/Protect the 

Public $644 $644 0.0% $644 $513 

Enterprise Identity and Access Management

Collect the 

Revenue/Protect the 

Public N/A N/A N/A N/A $172 

Total IT Investments

Collect the 

Revenue/Protect the 

Public $22,382 $21,384 -4.5% $21,384 $21,593 

Note: In past budget submissions (FY 2011 and prior), TTB’s Enterprise Identity and Access Management (EIdAM) funding was spread across the entirinvestments and was not depicted as a standalone investment/line item within the Table 4.1 as it was not a requirement to do so. As part of the FY 2012 (per OMB and Treasury CPIC guidance), TTB’s Table 4.1 now includes the EIdAM investment as a separate line item with associated projected costs i

TTB - 25 
4B – Information Technology Strategy 

TTB’s Strategic Plan establishes the vision and objectives for the bureau in the business 

context. TTB’s Information Technology (IT) Strategic Plan is a five-year plan based on the 

business strategy, which includes the bureau’s mission, vision, goals, and objectives from the IT 

perspective. This plan charts the course the bureau will follow in the coming years to develop 

and implement IT solutions that are aimed at streamlining the collection of data, leveraging web 

technologies, and making the Internet the method of choice for the reporting and exchanging of 

information. By aligning business and technical strategy, the bureau is able to leverage 

technology to enable the bureau to meet its objectives in the most efficient and cost-effective 

manner while identifying ways to minimize system redundancy. 

TTB has no major IT investments based on the OMB and the Department of Treasury criteria. 

Several non-major investments, however, directly support the mission, strategy, and day-to-day 

operations of the bureau. These include: 

TTB Tax System – This investment consists of several component applications that ensure fair 

and proper collection of revenue from the industry members for alcohol, tobacco, firearms, and 

ammunition excise taxes and ensures compliance with the excise tax regulations. 

TTB Regulatory System – This investment includes applications that streamline the beverage 

and non-beverage alcohol formula approval process and COLA issuance for tax and regulatory 

compliance. 

TTB General Support Services – This investment provides TTB users with the infrastructure 

applications necessary to conduct daily business. 

TTB Enterprise Architecture – This investment is integrated with the strategic planning, 

portfolio management, and capital planning processes. 

In addition to leveraging IT to support the mission, strategy, and day-to-day operations of the 

bureau, TTB supports and maintains strategy alignment with OMB and Treasury through 

enterprise wide IT initiatives. These include: Cyber Security; IT Infrastructure; Electronic 

Identity and Access Management (HSPD-12); Enterprise-wide Contracts and Services; and 

Program Metrics and Milestones. 

TTB - 26